Monday, 22 December 2014
Last updated 1 hour ago
Feb 25 2011 | 9:14am ET
The Securities and Exchange Commission has charged a prominent former hedge fund manager and four others with manipulating markets in U.S. micro-cap stocks.
Florian Homm, the founder and former chief investment officer of Absolute Capital Management, and Todd Ficeto earned some $63 million in illegal profits through their California brokerage, Hunter World Markets, the agency alleges, as part of a "portfolio pumping" scam. The price manipulation allegedly allowed Homm to overstate AbCap's performance by at least $440 million.
Homm and Ficeto, with the help of Homm associate Colin Heatherington and HWM's trader and chief compliance officer, employed "a number of classic manipulative techniques such as placing matched orders, placing orders that market the close or otherwise set the closing price for the day and conducting wash sales."
Among the SEC's evidence are hundreds of instant messages between HWM and AbCap, collected through a system that the agency said was designed to avoid detection.
The SEC is seeking injunctive relief, disgorgement of allegedly ill-gotten gains, prejudgment interest and fines, as well as several bans against Ficeto. The HWM trader and CCO have settled the charges against them.
Homm made news in 2006 when he was shot by a robber in Venezuela. He returned to work at AbCap a few weeks, before quitting in September 2007 over compensation issues. Since then, both he and AbCap have been dogged by litigation filed by angry investors, including one suit over HWM.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.