Hedge Fund Manager Fined by SEC Over Communication With Husband

Updated on
  • Chopra’s spouse shared confidential analysis with her: SEC
  • Chopra and her hedge fund, Ratan, agree to pay $400,000

Nehal Chopra, whose hedge fund career got an assist from billionaire Julian Robertson, has been fined by U.S. regulators for allegedly engaging in communications with her husband that violated securities laws.

Nehal Chopra

Source: Bloomberg Television

Chopra, 37, runs Ratan Capital Management, a firm she started in 2009 with $25 million from Robertson. Chopra’s husband, Paritosh Gupta, worked at another hedge fund called Brahman Capital from 2005 until 2013.

While Gupta worked at Brahman, the New York firm prepared investment analysis that was exclusively meant for its employees and its clients. Gupta, 37, broke the rules by occasionally sharing the investment recommendations with Chopra, the Securities and Exchange Commission said in a Tuesday complaint. Chopra’s infractions included failing to tell her investors of the role her husband played in her business, the agency added.

Chopra and Ratan Capital will pay $400,000 to settle the SEC’s allegations, while Gupta was fined $250,000. Brahman separately agreed to pay a $250,000 penalty for failing to supervise Gupta. All of the parties settled their cases without admitting or denying the SEC’s claims.

Lawyers for Chopra and Gupta didn’t return emails seeking comment.

Inappropriate Recommendations

At times, Gupta would email his wife with internal recommendations, going as far as to tell her how big or small her bets should be. In March 2010, Gupta advised Chopra that she increase her position in a particular security on the same day Brahman also raised its stake, according to the SEC. On one occasion, Gupta monitored the hedge fund’s entire portfolio while his wife was out of the country.

Chopra’s profile jumped after she convinced Robertson, 85, to invest in Ratan and her fund outpeformed a number of rivals. Funds started by former employees of Robertson’s Tiger Management are known in the industry as Tiger cubs, while firms he invests in are called Tiger seeds.

Chopra’s fortunes reversed in 2015 when Ratan plunged 19 percent, Bloomberg has previously reported. The fund was hit by its wager on beleaguered Valeant Pharmaceuticals International Inc., which made up almost 13 percent of the firm’s publicly disclosed stock holdings at the end of that year’s third quarter. Valeant, which came under fire for its drug-pricing policies, sunk more than 61 percent between its peak in August and the end 2015. 

The following year, Robertson pulled all his money from the firm.

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