A former partner at the defunct Vicis Capital has settled charges that he profited from the purchase by the hedge fund of a friend's investments.
Shadron Stastney required his friend, who was not identified, to divest himself of $7.7 million worth of securities when he joined New York-based Vicis, because they overlapped with the firm's own investments. According to the Securities and Exchange Commission, Stastney authorized Vicis' purchase of the securities—without telling his partners that he had a financial stake in some of those securities.
The SEC alleges that Stastney earned more than $2 million from the sale.
As part of the settlement, Stastney—who did not admit or deny wrongdoing—will pay nearly $2.9 million, and is barred from the securities industry for at least a year-and-a-half.
Vicis closed its doors in 2010 amidst poor performance, heavy redemptions and a Federal Bureau of Investigation probe.