The Securities and Exchange Commission has suspended John Fife, principal of hedge fund Clarion Management.
Fife formed the firm exclusively for the purpose of market timing through variable annuities. According to the SEC, between 2002 and 2003 Fife schemed to purchase variable annuity contracts issued by the Lincoln National Life Insurance Company in order to engage in market timing in international mutual funds. Fife’s scheme involved using fictitious family trusts owned by Clarion to purchase from Lincoln what the firm otherwise could not have purchased in its own name.
When his market timing in the Lincoln variable annuity contracts became excessive, Lincoln restricted trading in those contracts. But Fife continued to purchase more variable annuity contracts, including using previously unused trusts and trustees with mailing addresses in different parts of Chicago.
On August 9, a final judgment was entered against Fife barring him from associating with any investment advisor for 18 months.