Jurors favored the defendants in a case brought in London by the U.K.’s Serious Fraud Office. In the U.S., the Securities and Exchange Commission fined Goldman Sachs $15 million over locates for short sales, fined and barred a hedge fund manager and froze the assets of a company alleged to have fraudulently offered securities in oil and gas investment programs.
Hedge Fund to Repay Nearly $3 Million for Hiding Losses
Manhattan-based investment advisory firm QED Benchmark Management LLC and its Toronto-based hedge fund manager, founder/fund manager Peter Kuperman, have agreed to settle charges that they misled investors about a fund’s investment strategy and historical performance. They will reimburse investors for $2.877 million in losses.
According to the agency, QED and Kuperman hid heavy trading losses from investors by using a misleading mixture of hypothetical and actual returns when providing the fund’s performance history. Investors put millions of dollars into the fund based on these misrepresentations, and QED Benchmark and Kuperman tossed their stated investment strategy to pour most of the fund’s assets into a single penny stock. They continued to hide the value and liquidity of this penny stock investment from fund investors.
Kuperman and QED Benchmark Management neither admitted nor denied the SEC’s charges but agreed to the settlement. In addition to making the $2.877 million payment to fully reimburse fund investors for their losses, Kuperman has agreed to pay a $75,000 penalty and be barred from the securities industry.
Jury Acquits Six in U.K. LIBOR Case
Six former brokers were acquitted by a jury in London of attempting to rig the London Interbank Offered Rate (LIBOR), after they were accused of conspiring with a seventh — former UBS Group AG and Citigroup Inc. trader Tom Hayes, who was convicted last year and is now in prison.
The six, Colin Goodman, Danny Wilkinson and Darrell Read, formerly of ICAP Plc; Noel Cryan of Tullett Prebon Plc in London; and Terry Farr and James Gilmour from RP Martin Holdings Ltd., were found not guilty and released.
The verdict, after a four-month trial, came as a blow to the Serious Fraud Office’s efforts to prosecute others in the LIBOR case. It is the second trial held in Britain focusing on LIBOR rigging, with a third trial expected to begin as soon as next month.
A trial in the U.S., conducted last year, ended in November with two convictions.
LIBOR helps determine the borrowing costs for about $450 trillion of contracts and consumer loans worldwide.
Goldman Sachs Fined $15 Million
Goldman Sachs was censured and fined $15 million by the SEC after the agency said its securities lending practices violated federal regulations — specifically, Regulation SHO.