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Fountainhead Founders Settle With SEC

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WASHINGTON, D.C. (–William J. Lennon and Anthony P. Postiglione Jr. have settled with regulators and have been enjoined from violating further securities laws more than a year after the Securities and Exchange Commission filed a its complaint against the hedge fund managers.

Together they were partners and shareholders in Fountainhead Asset Management and raised more than US$5 million for the Fountainhead Fund LP from at least 18 investors. According to the SEC, Fountainhead investors were lulled into keeping their assets in the purported hedge fund, and the money was misappropriated.

During the course of the fraud, Messrs. Postiglione and Lennon were thought to have traded excessively several fund accounts for the purposes of generating consideration from brokers through which they traded in the form of soft dollar credits, which they used for personal living expenses. The SEC complaint also highlights that several hundred thousand dollars in fund assets were used for personal expenses.

In the settlement offer, Messrs. Postiglione and Lennon did not admit or deny the findings. The final judgment was entered by consent on Sept. 20 in the U.S. District Court for the Eastern District of Pennsylvania, enjoining them from violating a number of securities trading and investment advisory laws.

Contact Bob Keane with questions or comments at [email protected].


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