UPDATE: HedgeCo.net (West Palm Beach) – Najy N. Nasser, Chief Investment Officer of the Bahamas/UK based hedge funds, Headstart Advisers Limited (HAL) and Headstart Fund, has agreed with the SEC to pay $17.8 million in a settlement regarding a 2003 alleged late trading scheme.

Without admitting or denying the allegations, the civil settlement includes payments of $17 million by the defunct Headstart Fund Ltd (domiciled in the Bahamas), $200,000 by Headstart Advisers Ltd and $600,000 by Mr Najy Nasser, the Chief Investment Officer. This settlement will conclude the case brought by the SEC against Headstart Fund Ltd, Headstart Advisers Ltd and Mr Najy Nasser arising from Headstart’s historic market-timing strategy.

The Commission’s Complaint alleged that the Bahamas hedge fund, Headstart, acting through its United Kingdom investment adviser, HAL, engaged in fraudulent late trading and deceptive market timing of U.S. mutual funds through accounts at U.S. broker-dealers. Headstart has since September 2003 focused its business on other successful strategies.

Nasser said in response to the settlement, “Headstart is very pleased to have reached a settlement.  We responded to US concerns about market timing and immediately ceased this element of Headstart’s business in September 2003.  We have since worked hard to build up Headstart’s funds using different strategies. As we equalled or bettered our overall returns against our benchmark, we are especially pleased with what we have achieved.

"We have superb long-term performance against both the market and our peer group and have some interesting plans to grow Headstart’s investment business,” he concluded.

Alex Akesson

Editor for HedgeCo.Net
Email: alex@hedgeco.net

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New York (HedgeCo.Net) – The SEC has targeted hedge funders David Myatt and William Eichengreen, both of Directors Performance Fund, with charges of fraud. 

The two men allegedly took $25 million of their investment advisors money and put it into a “prime bank” scheme.  This kind of scheme generally involves investors fraudulent claims that funds will be used to purchase “prime” financial instruments, usually in overseas markets, with the promise of high returns.  Most of the time, neither the instruments nor the markets they supposedly trade on through special “access” even exist.  In this case, Myatt and Eichengreen promised returns in excess of 10% per week with minimum risk.

Eichengreen then falsified documents pertaining to performance while lying about the fund strategy and asset allocation.  The hedge fund also raked in performance fees that were based on the doctored numbers. 

Investors in the fund should receive their money back, after a previous suit resulted in the court being responsible for distributing the assets back to investors.  Myatt also previously pleaded guilty to an obstruction of justice charge that was brought against him in connection with this hedge fund.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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