WASHINGTON (HedgeWorld.com)–Jeffrey Thorp allegedly realized more than US$7 million in ill-gotten gains through illegal trading of private investment in public equity deals.
Mr. Thorp managed three New York-based hedge funds–Langley Partners LP, North Olmsted Partners LP, and Quantico Partners LP–that profited from the short selling of PIPE securities in the United States and Canada from 2000 through 2002, according to a complaint released by the Securities and Exchange Commission this week on the same day, March 14, it announced a settlement with Mr. Thorp.
As part of the settlement, Langley Partners will pay back US$8.8 million in illegal gains and pre-judgment interest. Mr. Thorp didn’t admit or deny the commission’s allegations. The final judgment ordered him to pay US$2.3 million in civil penalties.
At one time it is thought that the SEC had as many as nine ongoing PIPE-related hedge fund investigations. Although published reports last year indicated at least four high-profile firms were subject to regulatory scrutiny, only one other high-profile case has come to an end–that of Hilary L. Shane, who settled with the NASD and SEC over insider trading allegations stemming from a PIPE deal with CompuDyne Corp.