Leon Cooperman, accused Wednesday of buying shares in Atlas Pipeline Partners after obtaining insider information, has been investing with the family that managed the company for more than a decade. It hasn’t always paid off.
Cooperman, 73, and his son Wayne bought stakes in at least five companies controlled or managed by Ed Cohen and his sons Jonathan and Daniel since 2000, including Atlas Resource Partners LP, Atlas Energy Group LLC, Resource America Inc. and Institutional Financial Markets Inc. Some have lost money for investors -- in two cases, more than 80 percent of their value on public exchanges.
Led by septuagenarian patriarch Ed Cohen, who has a penchant for speaking in Latin on earnings calls, the family has run small businesses spanning natural gas, banking and real estate. The Coopermans have often been among their biggest investors.
“Atlas Pipeline was one of several companies controlled by the Cohen family, a number of whose members I had known for many years,” the elder Cooperman wrote in a letter to shareholders of his $5.4 billion hedge fund, Omega Advisors, hours after he was accused of insider trading by the U.S. Securities and Exchange Commission. Cooperman also said in the letter that he and his firm hadn’t engaged in any unlawful conduct.
“We haven’t spoken for a year because of litigation,” Cooperman said in an e-mail Wednesday on his relations with the Cohens. “You’re not allowed to talk.”
Wayne Cooperman didn’t return a phone call or respond to an e-mail. Matt Barkett, a spokesman for the Cohens’ companies at Dix & Eaton, said he wasn’t immediately able to provide a comment.
Confidential Information
Cooperman was accused of insider trading in Atlas Pipeline after obtaining confidential information from an Atlas Pipeline executive in 2010 about the sale of a company asset that caused the shares to jump 31 percent, according to an SEC statement. Cooperman, who had owned 9 percent of Atlas Pipeline, described it as a “shitty business” just before buying more of its securities, the complaint said.
“The SEC is relying on a theoretical calculation of unrealized gains, not actual profits,” Cooperman said on a Wednesday afternoon call with investors. “In actuality, I’m embarrassed to say the losses were gigantic.”
The SEC complaint also mentions two other Cohen companies in which Cooperman had substantial stakes: Atlas Resource Partners, a gas and oil producer, and Resource America, which managed real estate investments. Cooperman failed to disclose purchases in Atlas Resource Partners in a timely fashion, and under-reported his ownership in Resource America, according to the complaint.