Hedge Funds Settle SEC Illegal Trading Claims

Law360, New York (March 14, 2006, 12:00 AM EST) -- Hedge fund manager Jeffrey Thorp and three New York-based hedge funds he oversees reached an agreement to shell out $15.8 million to resolve claims brought on by the U.S. Securities and Exchange Commission that they made millions of dollars through illegal “PIPE” deals and naked short sales.

The SEC said the three hedge funds, Langley Partners, North Olmsted Partners and Quantico Partners, and Thorp, their portfolio manager, attempted to avoid registration requirements with 23 securities offerings, known as “PIPEs,” or Private Investment in Public Equity....
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