Wednesday, 1 October 2014
Last updated 2 hours ago
Oct 12 2012 | 12:02pm ET
Guggenheim Securities and two traders have been rapped for allegedly tricking a hedge fund into overpaying for something, and then hiding it by making a secret deal with the hedge fund.
The Financial Industry Regulatory Authority ordered Guggenheim to pay $800,000 in fines for failing to supervise the two now-former traders. The traders, Alexander Rekeda and Timothy Day were suspended from the industry for one year and four months, respectively. In addition, Rekeda, the former head of Guggenheim's collateralized debt obligations desk, was ordered to pay $50,000, and Day $20,000.
FINRA accused Rekeda and Day of tricking the hedge fund into overpaying for a collateralized loan obligation to hide a loss they made on the CLO. The two allegedly lied to the hedge fund, which was not identified, telling it that the CLO was part of a package offered by a third party.
When the hedge fund started asking questions, it and the two traders struck a deal, with the hedge fund accepting the higher price in exchange for cash and fee breaks.
"Guggenheim's inadequate supervision allowed their traders to engage in extensive and repeated inappropriate actions to try to conceal a trading loss," FINRA enforcement chief Brad Bennett said.
FINRA does not regulate hedge funds, sparing the unknown firm a sanction of its own.
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...