Monday, 28 July 2014
Last updated 11 hours ago
Jun 17 2011 | 3:55am ET
A hedge fund has settled charges that it was paid $90,000 to share trades with another firm without passing the proceeds on to investors.
Pegasus Investment Management, its president and vice president agreed to pay a total of $165,000 to make the charges go away, without admitting or denying wrongdoing. The Securities and Exchange Commission alleges that the firm made a deal to combine its trades with another firm so that the other firm would qualify for volume discounts. Bainbridge Island, Wash.-based PIM was paid its share—allegedly 50 cents per trade—over a 10-month period in 2008 and 2009.
"The law is well-established that a fund's trade volume belongs to the fund's clients, not the adviser," Robert Leach of the SEC's asset management unit in San Francisco said. "In this case, PIM improperly used that asset for its own benefit and without disclosure to its investors."
In addition to PIM itself, the SEC rapped Peter Bortel, a vice president at the hedge fund, for his role, and Douglas Saksa, its president and chief compliance officer, for supervisory failures. Bortel, who has since left Pegasus to launch his own firm, will pay $50,000 and Saksa $25,000. PIM will pay the $90,000.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…