Malaysia Accuses Hedge Fund Of Market Manipulation

Apr 10 2008 | 7:34am ET

The Malaysian financial regulator has sued a New York-based hedge fund for market manipulation, it said today.

The Malaysian Securities Commission filed suit against Aeneas Capital Management, three of its employees and two related entities, as well as three others, in Kuala Lumpur High Court.

 According to Malaysian authorities, the defendants “collectively used numerous trading accounts which contributed to the strong demand for Iris shares.” That “artificial demand” sent Iris Corp. shares up 17-fold between September 2005 and May 2006. Kuala Lumpur-based Iris, which supplies digital identity cards, has seen its stock price drop 32% this year.

Malaysian and American authorities have been investigating Aeneas since at least 2000, according to Bloomberg News, probing more than 100 accounts and sifting through more than 200,000 e-mails. Regulators in Britain, Hong Kong and Singapore also assisted in the investigation.

The Securities Commission is seeking compensation for other Iris investors, damages and a trading ban on the country’s stock exchange, Bursa Malaysia.

In addition to Aeneas itself, the Malaysian suit names managing partner Thomas Grossman, a SAC Capital Advisors veteran, research analyst Richard Benjamin Cohen and chief operating officer John Suglia.


In Depth

Delayed Flash Crash Arrest Highlights Difficulties Detecting Fraud

Apr 23 2015 | 7:19am ET

The five years it took regulators to bring high-profile charges against a UK trader...

Lifestyle

Puerto Rico Woos The Rich But So Far Gains Little

Apr 17 2015 | 2:45am ET

Hedge fund manager Rob Rill grins. He has just had word that U.S. financial regulators...

Guest Contributor

Opportunities Ahead: Asian Fixed Income and Currency Markets

Apr 24 2015 | 6:18am ET

For hedge funds focusing on Asia, the policy uncertainty, unclear interest rate...

 

Editor's Note