Pa. Hedge Fund Manager Beats SEC On Most PIPE Counts

Sep 16 2010 | 11:43am ET

A Philadelphia-area hedge fund manager declared victory in his battle with the Securities and Exchange Commission after a judge rejected most of the charges against him and refused to impose civil penalties or pre-judgment interest.

Robert Berlacher was found to have misrepresented his positions before participating in a pair of private investments in public entities and ordered to pay $352,364 in illegal profits. But U.S. District Judge Mitchell Goldberg, who heard the three-day bench trial in March, said that Berlacher was not guilty of insider-trading in one case because the PIPE-issuing company’s stock price failed to move much in the wake of the announcement. Goldberg also ruled in Berlacher’s favor on securities fraud charges in two other PIPE deals.

“The SEC has not sustained its burden of proof on the insider-trading count and two of the fraud claims,” Goldberg wrote. “The SEC has met its burden on two separate fraud claims.”

“We are gratified that today’s decision by the court rejects the lion’s share of the SEC’s claims and its overreaching attempt to mischaracterize certain conduct as a violation of federal law,” Berlacher’s lawyer, Nicolas Morgan, said in a statement.

The SEC had accused Berlacher of participating in four PIPE deals in which shorting the companies’ shares after learning in advance about the placements and without telling the companies issuing the shares.


In Depth

Q&A: Rotation Capital's Rothfleisch On SPAC 2.0

Aug 11 2017 | 7:43pm ET

Corporate actions have long been a staple of event-driven investors, but activity...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Star Mountain: Private Lending in the Lower Middle-Market

Aug 14 2017 | 4:45pm ET

Private credit has become one of the most popular alternative asset classes in recent...

 

From the current issue of