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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Forbes – New Jersey’s Bureau of Securities permanently barred three former Merrill Lynch brokers accused of helping a hedge fund make tens of thousands of improper trades in mutual funds.

Christopher Chung, Kevin Brunnock and William Savino will collectively pay $1.15 million in civil penalties, under terms of an administrative consent order, according to a statement from New Jersey’s attorney-general.

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Tags: attorney general, civil-penalties, consent order, forbes, merrill-lynch, mutual funds, savino, tens of thousands, trades

CNNMoney.com – A shareholder has sued CSX Corp. (CSX) and two hedge funds over sales of CSX shares before the funds publicly disclosed plans to shake up the railroad operator’s board in a proxy fight earlier this year.

The lawsuit, filed in U.S. District Court in Manhattan on Tuesday, is seeking recovery of so-called "short-swing" profits related to sales by The Children’s Investment Fund Management LLP, or TCI; 3G Capital Partners LP and their principals between August and September 2007 on behalf of the company and its shareholders. CSX is a nominal defendant in the case.

The complaint alleges the funds or their principals purchased large numbers of shares and derivatives equivalent to CSX shares within six months of their prior share sales and at lower prices.

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Tags: asset-management, brian-l-roberts, civil-penalties, client-expectations, embarrassment, general-electric-co, img-src, industry-experience, japanese-government, mapeley, outsiders, public-offering, railroad-experience, standalone-basis, university-of-texas, us-congress