U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23200 / February 18, 2015
Securities and Exchange Commission v. Steven B. Hart, Civil Action No. 12-CV-8986 (S.D.N.Y.)
Steven Hart Charged with Obstruction of Justice and Perjury Relating to an SEC Investigation
Former investment management firm employee Steven Hart of New York City, who was the subject of a prior SEC investigation and enforcement action, has been criminally charged by the U.S. Attorney for the Southern District of New York with obstruction of justice (18 U.S.C. § 1505) and perjury (18 U.S.C. § 1621). The U.S. Attorney announced the action on February 17.
The alleged criminal acts took place during an SEC investigation involving Hart, which culminated in a federal injunctive action in which Hart agreed to pay over $1.3 million to settle the SEC's charges (Securities and Exchange Commission v. Steven B. Hart, Civil Action No. 12-CV-8986 (S.D.N.Y. Dec. 11, 2012)). As alleged in the SEC's complaint, Hart, among other things, conducted a pair of illegal trading schemes to financially benefit his investment fund Octagon Partners LP. In one scheme, Hart illegally matched 31 pre-market trades to benefit his own fund at the expense of one of his employer's funds. In the other scheme, Hart conducted insider trading in the securities of 19 issuers based on material non-public information he learned after being solicited to invest in the issuers' confidentially-marketed securities offerings. In addition, Hart signed two securities purchase agreements in which he falsely represented that he had not traded in the issuer's securities prior to the public announcement of the offerings in which he had been confidentially solicited to invest. Without admitting or denying the allegations, Hart consented to the entry of judgment enjoining him from future violations of certain antifraud provisions of the federal securities laws. Following the injunctive action, Hart also consented to institution of administrative proceedings, without admitting or denying the allegations, barring him from association with any investment adviser, broker, dealer, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization (In the Matter of Steven B. Hart, Investment Advisers Act of 1940 Release No. 3524 (Dec. 20, 2012)).