Fontana Settles Shorting Allegations

Jul 11 2011 | 11:35am ET

Defunct hedge fund Fontana Capital has settled Securities and Exchange Commission charges that it illegally short-sold three financial stocks.

Boston-based Fontana, led by former SAC Capital Advisors trader Forrest Fontana, agreed to pay more than $900,000 without admitting or denying the charges. According to the SEC, the hedge fund earned more than $800,000 in illicit profits three years ago short-selling the three stocks within five days of a public offering in which Fontana participated. The SEC's Rule 105 prohibits such trades to prevent market manipulation.

The SEC had accused Fontana of making more than $1 million on the trades in Merrill Lynch, XL Capital and Wells Fargo securities in January. At the time, Fontana's lawyer called the violations "isolated, inadvertent, technical."

Fontana ceased managing outside money last year.


In Depth

PAAMCO: Will Inflation Deflate the Asset Bubble?

Jan 30 2018 | 9:49pm ET

As the U.S. shifts from monetary stimulus to fiscal stimulus, market pricing should...

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

Boost Hedge Fund Marketing ROI By Raising Your ROO

Feb 14 2018 | 9:57pm ET

Tasked with delivering returns on client capital, a common dilemma for many alternative...