Sunday, 25 January 2015
Last updated 1 day ago
Oct 25 2007 | 2:42pm ET
A former hedge fund manager is halfway home towards being cleared of insider-trading charges.
John Mangan, half of the now defunct Charlotte, N.C., hedge fund Mangan and McColl Partners, said that a federal judge had dismissed an alleged violation during a short-sale involving a private investment in public equity.
Mangan, who is now reportedly working in private securities trading, expressed optimism that Judge Graham Mullen of the U.S. District Court for the Western District of North Carolina would also dismiss the insider trading charges against him at a summary judgment hearing in March.
The Securities and Exchange Commission in December accused Mangan of making some $178,870 in ill-gotten profits in trading CompuDyne Corp. shares while working for Friedman Billings Ramsey in 2001. The agency said Mangan had shorted CompuDyne after learning of a planned PIPE, and that he also sold unregistered CompuDyne shares after the PIPE was announced.
Mangan allegedly used the account of HLM Securities, an investment advisor run by former partner Hugh McColl to buy 80,000 shares in the PIPE. McColl was named as only a “relief defendant,” meaning he was cleared of any wrongdoing but was caught holding the money obtained by Mangan, settled with the SEC for $115,643, amounting to the proceeds of the alleged crime plus interest.
The duo founded Mangan and McColl after Mangan left FBR.
Mangan himself settled NASD charges related to the CompuDyne trades in December 2005 without admitting or denying wrongdoing. His old firm, FBR, and three of its former executives last year settled insider-trading charges—also regarding CompuDyne—for $9 million.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…