President Barack Obama’s re-election campaign and the Obama Victory Fund have accepted just under $25,000 in donations since 2008 from business executive David Zilkha, according to Federal Election Commission records.
Zilkha, though, paid 10 times as much — $250,000 — in fines to the Securities and Exchange Commission (SEC) after he was found to be involved in an insider-trading scheme last year.
An SEC judge ordered Zilkha to pay that fine after he was found to be passing non-public earnings information from Microsoft to Pequot Capital Management.
Zilkha was a Microsoft employee who Pequot CEO Arthur Samberg hired in 2001. The SEC says that the only reason Samberg hired Zilkha was because of his access to the insider Microsoft information that Samberg then traded on. Shortly after Zilkha no longer had access to internal Microsoft financials, Samberg fired him.
“Samberg’s sole purpose in hiring Zilkha was to obtain material non-public information on Microsoft,” an April 2011 SEC report reads. “Samberg acted on Zilkha’s Microsoft recommendations only when they appeared to have been based on information obtained from Microsoft employees.”
“Samberg fired him when he could no longer obtain information on Microsoft. Samberg notified him on September 25 that he would be terminated, and he was actually terminated on November 16,” the report continues. “He received a prorated portion of his $250,000 salary (approximately $173,000), and Samberg agreed to pay him a $250,000 bonus for the year, as originally offered.”
In 2007, Zilkha sued Samberg alleging he “fraudulently induc[ed] him to accept employment at Pequot,” the SEC report adds.
Zilkha had been under investigation in 2005 and 2006 and the SEC alleges that during that time, he “concealed” from federal investigators proof that he was part of the insider-trading plan Samberg had with Microsoft.
In 2009, Zilkha’s ex-wife provided the emails and other information to SEC staff on a hard drive she had in her possession. The SEC says the information Zilkha leaked to Samberg as part of the insider-trading plot helped Pequot make about $14 million in illegal profits.
That information led to Zilkha being ordered to pay $250,000.
And, according to the Associated Press, Pequot and Samberg “together are paying $10 million in civil fines and $18 million in restitution of trading profits plus interest.”
While Obama’s anti-Wall Street rhetoric fires up his liberal base, his administration hasn’t done much to hold the supposedly dirty finance executives accountable. In fact, a recent report by the conservative Government Accountability Institute (GAI) found that despite all of Obama’s and Attorney General Eric Holder’s attacks on Wall Street “fat cats,” they haven’t criminally charge a single top Wall Street banker. The report continued that this is because Obama and Holder have political and crony connections to the very people they’re supposed to be holding accountable.
