Mass. Hedge Fund Sues To End State Registration

Mar 5 2014 | 1:27pm ET

A Massachusetts hedge fund has sued the state’s securities regulator, alleging that William Galvin is blocking its transition to registration with the Securities and Exchange Commission.

Opaleye Management—formerly known as Risk Reward Capital Management—said that Galvin, Massachusetts’ secretary of the commonwealth, is illegally forcing it to retain redundant registrations, with both the state and SEC. Galvin’s office said Opaleye can’t deregister in the state while it is under investigation, as it has been for three years.

Risk Reward was accused of insider trading in 2011. Galvin alleges that the firm used expert network consultants to obtain confidential information about at least two pharmaceutical companies.

Opaleye was required to register with the SEC late last year, after its assets under management topped $100 million.


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