UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
INVESTMENT ADVISERS ACT OF 1940
Release No. 3027 / May 12, 2010
ADMINISTRATIVE PROCEEDING
File No. 3-13891
ORDER INSTITUTING
In the Matter of ADMINISTRATIVE PROCEEDINGS
PURSUANT TO SECTION 203(f) OF THE
ALI T. FAR and INVESTMENT ADVISERS ACT OF 1940,
CHOO-BENG LEE, MAKING FINDINGS, AND IMPOSING
REMEDIAL SANCTIONS
Respondents.
I.
The Securities and Exchange Commission (“Commission”) deems it appropriate and in the
public interest that public administrative proceedings be, and hereby are, instituted pursuant to
Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Ali T. Far (“Far”)
and Choo-Beng Lee (“Lee”) (collectively, “Respondents”).
II.
In anticipation of the institution of these proceedings, Respondents have submitted an Offer
of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the
purpose of these proceedings and any other proceedings brought by or on behalf of the
Commission, or to which the Commission is a party, and without admitting or denying the findings
herein, except as to the Commission’s jurisdiction over them and the subject matter of these
proceedings, and the findings contained in Sections III.3, III.5 and III.7 below, which are admitted,
Respondents consent to the entry of this Order Instituting Administrative Proceedings Pursuant to
Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial
Sanctions (“Order”), as set forth below.
III.
On the basis of this Order and Respondents’ Offer, the Commission finds that:
1. Far, age 48, resides in Saratoga, California. Far is a Managing Member and
co-founder of Spherix Capital LLC (“Spherix Capital”). Far was also a Managing Member of Far
& Lee LLC (“Far & Lee”). Far was previously a Managing Director at Galleon Management, LP.
Far previously held Series 7 and 63 licenses.
2. Lee, age 52, resides in San Jose, California. Lee is a co-founder and
President of Spherix Capital. Lee was also a Managing Member of Far & Lee. Lee was
previously a portfolio manager with Stratix Asset Management.
3. On November 5, 2009, the Commission filed a complaint against Far and
Lee in SEC v. Galleon Management, LP, et al., Civil Action No. 09 Civ. 8811 (JSR). On February
2, 2010, the Court entered a final judgment permanently enjoining Far and Lee, by consent, from
future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 thereunder.
4. The Commission’s complaint alleged that in or around July 2007 Lee
obtained material, non-public information about Google, Inc. Lee passed this inside information to
his business partner Far, and Far and Lee traded on the basis of the information. The trades at issue
generated over $450,000 in illicit profits (or avoided losses) in one or more brokerage accounts
affiliated with Far & Lee. In or around December 2008 and February 2009, Far obtained material,
non-public information about Atheros Communications, Inc. Far shared this inside information
with Lee, and Spherix Capital traded on the basis of the information. The trades at issue generated
over $870,000 in illicit profits (or avoided losses) in one or more brokerage accounts affiliated with
Spherix Capital.
5. On October 19, 2009, Far pled guilty to one count of securities fraud in
violation of Title 15, United States Code, Sections 78j(b) and 78ff, Title 17, Code of Federal
Regulations, Section 240.10b-5 and Title 18, United States Code, Section 2; and one count of
conspiracy to commit securities fraud and wire fraud, in violation of Title 18, United States Code,
Section 371, before the United States District Court for the Southern District of New York, in
United States v. Ali Far (Criminal Information No. 1:09-CR-1009).
6. The counts of the criminal information to which Far pled guilty alleged,
inter alia, that Far conspired to, and did, obtain inside information regarding several technology
companies. In some cases, Far arranged to pay sources for the inside information. The trades at
issue are alleged to have generated over $5 million in illicit profits (or avoided losses) in one or
more brokerage accounts affiliated with Far & Lee or Spherix Capital.
2
7. On October 13, 2009, Lee pled guilty to one count of securities fraud in
violation of Title 15, United States Code, Sections 78j(b) and 78ff, Title 17, Code of Federal
Regulations, Section 240.10b-5 and Title 18, United States Code, Section 2; and one count of
conspiracy to commit securities fraud and wire fraud, in violation of Title 18, United States Code,
Section 371, before the United States District Court for the Southern District of New York, in
United States v. Richard Choo-Beng Lee (Criminal Information No. 1:09-CR-972).
8. The counts of the criminal information to which Lee pled guilty alleged,
inter alia, that Lee conspired to, and did, obtain inside information regarding several technology
companies. In some cases, Lee arranged to pay sources for the inside information. The trades at
issue are alleged to have generated over $5 million in illicit profits (or avoided losses) in one or
more brokerage accounts affiliated with Far & Lee or Spherix Capital.
IV.
In view of the foregoing, the Commission deems it appropriate and in the public interest to
impose the sanctions agreed to in Respondents’ Offer.
Accordingly, it is hereby ORDERED that:
Pursuant to Section 203(f) of the Advisers Act, Respondents Far and Lee be, and hereby are,
barred from association with any investment adviser.
Any reapplication for association by the Respondents will be subject to the applicable laws
and regulations governing the reentry process, and reentry may be conditioned upon a number of
factors, including, but not limited to, the satisfaction of any or all of the following: (a) any
disgorgement ordered against the Respondents, whether or not the Commission has fully or
partially waived payment of such disgorgement; (b) any arbitration award related to the conduct
that served as the basis for the Commission order; (c) any self-regulatory organization arbitration
award to a customer, whether or not related to the conduct that served as the basis for the
Commission order; and (d) any restitution order by a self-regulatory organization, whether or not
related to the conduct that served as the basis for the Commission order.
For the Commission, by its Secretary, pursuant to delegated authority.
Elizabeth M. Murphy
Secretary
