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

The Importance of Stability in the Evolving Hedge Fund Administration Market

Oct 5 2015 | 8:17pm ET

Hedge fund administration has evolved from simple record keeping to an integral,...


Citadel's Griffin Reaches Settlement in Contentious Divorce

Oct 8 2015 | 10:14pm ET

Billionaire hedge fund manager Ken Griffin and his wife have settled a long-running...

Guest Contributor

Hedge Fund Marketing To Independent RIA Firms

Sep 30 2015 | 1:56pm ET

In this contributed article, Bruce Frumerman of Frumerman & Nemeth Inc. explains...


Editor's Note