Aletheia Chief Warned Of Impending SEC Action

Nov 26 2012 | 12:09pm ET

With all eyes on SAC Capital Partners on the hedge fund fraud front, the Securities and Exchange Commission is weighing a lawsuit on another hedge fund manager.

Peter Eichler, CEO of Aletheia Research and Management, received a Wells notice, indicating that the SEC is likely to bring an enforcement action. The regulator is investigating allegedly improper trading, account manipulation and trade-allocation irregularities.

Aletheia, which manages both long-only funds and a hedge fund, filed for bankruptcy earlier this month. The firm, which once managed as much as $10 billion, is down to just $1.4 billion.

Eichler's lawyer said he would fight any charges leveled by the SEC.

The U.S. Justice Department is also getting involved in Aletheia's endgame, asking to be kept informed of all pleading in the case.

Aletheia last year paid $400,000 to settle SEC charges that it failed to keep sufficient records. It is also involved in a legal battle with private equity firm Proctor Investment Managers, which owns a 10% stake in the company.

Santa Monica, Calif.-based Aletheia listed $50 million in liabilities in its bankruptcy filing Nov. 11.


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