Thursday, 31 July 2014
Last updated 7 min ago
Mar 16 2009 | 11:37am ET
The Securities and Exchange Commission has sued two hedge fund employees for bribery, including taking more than $300,000 in exchange for routing trades to two brokers.
According to the complaint, from March 2003 to October 2005, JLF Asset Management’s Brian Travis and Nicholas Peter Vulpis solicited and accepted bribes from brokers, David Harrison Baker and Daniel Schreiber of Granite Financial Group. The Granite brokers allegedly paid for travel and various personal services, including hotel arrangements, the cost of building a special crate to transport Travis’ Great Dane, daily car service, computer equipment and monthly rent.
Travis and Vulpis received at least $312,000 in kickbacks, according to the SEC complaint, filed in Manhattan federal court.
Baker, Schreiber and Granite allegedly profited handsomely from this scheme, receiving approximately $10.7 million in commissions from trades that Travis and Vulpis directed to them.
Travis and Vulpis allegedly concealed their bribery scheme from JLF's hedge fund clients by using a "net" commission structure with Baker, Schreiber, Granite and others, to obscure the amount of trades they were directing and commissions they were paying to, among others, Baker, Schreiber and Granite. As a result, JLF did not disclose to its funds its material conflicts of interest.
The SEC's complaint seeks injunctive relief, disgorgement plus prejudgment interest, and civil penalties.
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…