Perry Settles Vote-Buying Charges

Jul 23 2009 | 2:28am ET

Perry Capital has settled charges that it sought to conceal its efforts to push forward a merger that Carl Icahn called “extremely stupid.”

The New York hedge fund agreed to pay $150,000 to settle the Securities and Exchange Commission complaint without admitting or denying the charges. The SEC alleged that Perry failed to disclose its purchase of almost 10% of the common shares of pharmaceutical company Mylan Laboratories with plans to back the company’s acquisition of King Pharmaceuticals. The hedge fund allegedly entered into swap transactions in an effort to skirt disclosure requirements, by masking the stock purchases as occurring “in the ordinary course of business.”

“By acquiring significant voting rights to Mylan shares without informing the marketplace, Perry illicitly increased its potential to profit from its merger arbitrage position,” said David Rosenfeld of the SEC's New York office. “Perry's failure to follow the disclosure obligations of the securities laws deprived the market of important and relevant facts.”

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