Beacon Rock, Former Broker Sentenced In Market-Timing Case

May 14 2008 | 9:10am ET

The first criminal mutual-fund market-timing case had made a former hedge fund broker the first to be sent up the river in the scandal that rocked the hedge fund and mutual fund worlds.

Thomas Gerbasio, a former Philadelphia-based registered representative, was sentenced to one year and one day in prison for his role in helping hedge fund Beacon Rock Capital engage in tens of thousands of fraudulent market-timing trades. Gerbasio helped design a strategy to allow Portland, Ore.-based Beacon Rock, which closed its hedge fund business in 2003 and has since split and rechristened itself the Beacon Investment Group, to skirt market-timing and trading limits imposed by mutual funds.

For its role in the scheme, Beacon—which pleaded guilty to one count of securities fraud last year—was sentenced to three years’ probation and will pay more than $1 million in forfeitures and fines. Gerbasio received two years of supervised release and was order to pay a $7,500 fine.

RELATED STORIES

Beacon Rock Cops A Plea
Beware The Beacon: Charged Fund Plays Name Game
Beacon Rock Changes Ownership, Name


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of