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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Reuters – Two employees of Allen Stanford’s financial business, which U.S. regulators have accused of massive fraud, held advisory roles at a watchdog group overseeing U.S. broker-dealers aimed at preventing abuses.

Lena Stinson, director of global compliance at Stanford Financial Group, served on the membership committee of the Financial Industry Regulatory Authority, or FINRA, which describes itself as the largest independent regulator of U.S. securities firms.

Frederick Fram, the chief operating officer of Stanford Group Holdings, served on the FINRA continuing education content committee, "where he participates in creating material for the Regulatory Element continuing education program," according to a biography on Stanford’s website.

The Stanford executives resigned from their posts last week at FINRA’s request, Brendan Intindola, a FINRA spokesman, said.

Stanford Group Co is a member of FINRA. Calls to Stanford’s Houston offices were not answered.

The firm referred all press inquiries to the U.S. Securities and Exchange Commission, which last week accused the Texas billionaire and two of his associates of a "massive ongoing fraud" related to the sale of $8 billion in certificates of deposit.

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Tags: advisory roles, broker-dealers, certificates of deposit, content committee, education content, financial business, financial industry regulatory authority, finra, global compliance, houston offices, independent regulator, massive-fraud, membership committee, regulatory element, s broker, securities-and-exchange-commission, stanford financial, stanford group, texas billionaire, watchdog group