By Amanda Becker
Nov 14 (Reuters) - A New York-based hedge fund employee hasbeen charged with trading on inside information about thechildren's clothing company Carter's Inc, the U.S.Securities and Exchange Commission (SEC) said on Thursday.
Mark Megalli, an investment professional with the hedge fundLevel Global Investors LP, obtained inside information thathelped his firm avoid about $2.4 million in losses and make$853,655 in ill-gotten profits, the SEC said in a statement.
Megalli received the information on which he traded from aformer vice president of investor relations at Carter's, EricMartin, who had left to form his own consulting firm butmaintained contacts at the Atlanta-based company. The SECcharged Martin with insider trading in August.
"The information was hot enough that Megalli sometimesconducted the trades while he was still on the phone with hissource," said William Hicks, an associate regional director inthe SEC's Atlanta office.
The U.S. Attorney's Office for the Northern District ofGeorgia has launched a parallel criminal case against Megalli,the SEC said.
The SEC's complaint, filed in a federal court in Georgia,alleges that Megalli began trading on information from insideCarter's shortly after joining Level Global Investors in August2009.
The investigation of Megalli is part of a larger probe intoinsider trading and financial fraud at Carter's. The SEC hasalready charged Joseph Elles, the company's former executivevice president, Joseph Pacifico, its former president, andMichael Johnson, an employee of retailer Kohl's Corp who workedon the Carter's account.
Carter's has been cooperating with the SEC as part of anon-prosecution agreement.
- Crime & Justice
- insider trading