SEC Charges 'Big Short' Money Manager With Fraud

Law360, Los Angeles (October 18, 2013, 8:44 PM EDT) -- The Securities and Exchange Commission brought fraud charges against Wing F. Chau, the New Jersey money manager who sued Michael Lewis for libel over his depiction in Lewis’ book “The Big Short,” claiming Chau misled investors in a $1.5 billion collateralized debt obligation.

The SEC claims Chau and his firm, Harding Advisory LLC, gave hedge fund firm Magnetar Capital LLC veto rights to choose collateral for the 2006 CDO, named Octans I, and never disclosed the information to investors. Magnetar bet against the CDO and used...
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