COOPERMAN: I want to protect my legacy

Thomson Reuters

Hedge fund legend Leon Cooperman said in a short call with investors Wednesday that he intends to fight charges of insider trading.

Cooperman, a hedge fund industry legend, was charged earlier Wednesday along with his hedge fund firm, $5.5 billion Omega Advisors. The charges surround a position the New York hedge fund allegedly took in Atlas Pipeline in 2010.

Cooperman said the feds offered him a settlement on the insider trading charges but he refused it so that he could protect his name and that of his hedge fund. He didn't say how much the settlement would cost, but said that it was less than what he donates to charity each year.

"It took me 50 years of hard work and playing by the rules to get where I got," Cooperman said with tone of defiance, adding that he wouldn't let the feds ruin his legacy. Cooperman is known for his rags-to-riches story, growing up in the South Bronx as the son of a plumber to becoming one of the industry's most successful players. He is worth $3.1 billion, according to Forbes.

The insider trading charges surround a position Omega allegedly took in Atlas Pipeline in 2010 based on inside information about the sale of one of Atlas' holdings, Elk City. The Securities and Exchange Commission accused Cooperman and Omega of benefiting from that information.

Rather, Cooperman said that the Atlas Pipeline holding had actually generated big losses for the firm. "I'm embarrassed to say the losses were gigantic," he said.

"We are being sued...even though we made no money from an increase from the stock price after the announcement," Cooperman said during the call.

Earlier Wednesday, Cooperman sent a five-page letter to investors in which he defended himself and the trades. In the letter, Cooperman said that Omega was not long, or bullish on an increase in Atlas' stock price, before the announcement. To be "long" means to be betting that the value of a security will go up.

The SEC alleges that Cooperman tried to coverup that he had spoken with an executive at Atlas Pipeline about the impending sale of Elk City before he traded on it. On the call, Cooperman said that that accusation was false. 

Cooperman also restated an earlier promise that he would voluntarily return money to his investors if the SEC case became too big of a distraction.

Cooperman declined to take questions, on advice of his counsel, though he said that he wished he could.

"I apologize for not being able to take questions," he said toward the end of the call, "but we're paying the lawyers a lot of money, and we're going to listen to the lawyers."

As of yesterday, Omega had posted positive returns for the year, he added. The Omega credit fund was up 13%, the Omega equity fund was up 5%, and the firm's main fund was up 3%.

NOW WATCH: Self-made millionaire reveals the biggest money mistake you might be making