Swiss Hedge Fund Manager Fined, Banned In U.K.

Sep 28 2012 | 2:32pm ET

A Swiss hedge fund manager has lost his bid to vacate £1.25 million (US$1.93 million) in fines and restitution and a ban from the securities industry.

The U.K.'s Upper Tribunal Tax and Chancery Chamber upheld the Financial Services Authority's levy against Stefan Chaligné and two brokers who worked with him. The regulator accused Chaligné of ordering the brokers, Cheikch Tidiane Diallo and Patrick Sejean, to buy up big blocks of seven stocks at the end of 2007 to drive up their price and his Iviron hedge fund's performance—and performance fees—for the year.

Chaligné did not deny that his purchases had manipulated the market, but argued that it had been inadvertent, and should therefore be subject to a smaller fine and no ban. But the FSA said the abuse was "blatant" and noted that Chaligné specified that the orders were to be placed at the last possible minute.

The Tribunal also ordered Sejean to pay £100,000 more than the FSA originally sought, calling his "one of the rare cases" in which the regulator "was too lenient."

Despite his ban from the U.K. industry and the upholding of the huge fine, Chaligné put on a brave face, asking that his disgorgement be paid to his investors.

"I am pleased that the Tribunal has decided that it was 'not in my contemplation' to cheat my investors," he said in a statement. "The Tribunal also found in my favor that, in the context of the turmoil of the markets in 2007, it was reasonable for me to fear an attack on the stocks held by the fund, which could cause them to reach unfair and inappropriate prices."


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.