Tuesday, 30 September 2014
Last updated 8 hours ago
May 7 2007 | 11:21am ET
The Securities and Exchange Commission has settled an administrative proceeding against Zurich Capital Markets for its role in financing hedge funds engaged in mutual fund market-timing.
According to the regulator, ZCM aided and abetted four hedge funds involved in illicit mutual fund trading by creating seemingly unaffiliated special-purpose vehicles, opening multiple brokerage accounts allowing the hedge funds to disguise their identities. ZCM allegedly profited from the fees it received for providing derivative financing to their hedge fund clients.
"By knowingly financing their hedge funds clients' deceptive market timing, ZCM reaped substantial fees at the expense of long-term mutual fund shareholder,” Mark Schonfeld, director of the SEC’s New York office, said. “Because of ZCM's attractive financing arrangement and its willingness to create a number of anonymous special purpose vehicles for its hedge fund clients, the hedge funds were able to inflate their trading profits from their deceptive conduct."
Zurich Capital was ordered to pay $12.8 million in disgorgement and prejudgment interest and a $4 million penalty. The firm, which is currently winding down its operations, consented to the order without admitting or denying the Commission's findings. The money will be distributed to the mutual funds that fell victims to the market-timing scheme.
Sep 22 2014 | 4:15pm ET
"I tell people that everybody likes good news and so if you have good performance that’s wonderful,” explains Mike McKitish of Peddie School's endowment, “but it’s the people that want to talk about the bad news or where they drifted and how they came back and how they stayed to their discipline…” that he wants to hear from. Read more…
Sep 30 2014 | 9:29am ET
The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…
High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...