WASHINGTON, DC - US regulators have accused two men in the first ever insider trading case involving the credit default swaps (CDS) market.
The Securities and Exchange Commission (SEC) alleges Deutsche Bank bond salesman Jon-Paul Rorech schemed to pass on confidential information to former hedge fund portfolio manager Renato Negrin, constituting market abuse.
The regulator says Negrin, formerly a portfolio manager at the Millennium Partners fund, gained an instant profit of $1.2 million from the inside information, relating to a high-yield debt offering by Dutch publishing firm VNU that Deutsche was working on in July 2006.
Rorech's lawyers say the accusations have "no merit" and that their client - currently on leave from Deutsche - was "simply doing his job" and would fight the charges. Negrin also denies the charges and maintains all conversations that took place were legal and appropriate.
Deutsche and Millennium say they are co-operating closely with the SEC - the fund adding that it has a "zero tolerance" policy towards insider trading.