Monday, 28 July 2014
Last updated 10 hours ago
Sep 11 2008 | 8:33am ET
The Securities and Exchange Commission has filed suit against a hedge fund manager, claiming he put his own trading interests ahead of his clients.
According to the lawsuit, filed in Manhattan federal court this week, James Dawson “cherry-picked profitable trades for his own account,” using a suspense account and “delaying allocation of the transactions until later in the day, after he saw whether the securities appreciated in value.” According to SEC figures, between 2003 and 2005, 98.3% of the trades he allocated to himself were profitable on the first day. The same could be said of just 51.7% of the trades that he allocated to the Victoria Investors hedge fund and his advisory clients
The SEC said Dawson never disclosed his trading habits to clients. The regulator also alleges that Dawson, who had led $13 million Victoria for more than 25 years, used investor money to pay personal expenses, including his family’s cell-phone bills, car service and non-business trips. The SEC also claims that Victoria paid a “purported salary” of more than $100,000 to Dawson’s wife.
The SEC is seeking forfeiture of ill-gotten gains and a fine against Dawson.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…