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Houston Chronicle – A London-based hedge fund manager and its chief investment officer have agreed to a nearly $18 million settlement resolving U.S. regulators’ allegations that one of its funds defrauded U.S. mutual funds and investors through trading practices such as market-timing.
The Securities and Exchange Commission and Headstart Advisers Ltd. on Monday separately announced a settlement in which the firm neither admitted nor denied allegations covering the period September 1998 through September 2003.
Headstart Fund Ltd., a hedge fund that had been incorporated in the Bahamas and is now defunct, will pay a $17 million penalty to resolve a complaint the SEC brought in April 2008. London-based Headstart Advisers will pay an additional $200,000, and Chief Investment Officer Najy N. Nasser will pay $600,000. The firm and Nasser are also barred from future violations of antifraud provisions of U.S. securities laws.
New York (HedgeCo.Net) – UBS AG will pay $200 million to settle the SEC charges that the Swiss Bank acted as an unregistered broker-dealer and investment adviser.
According to the original compliant, UBS helped certain U.S. individuals to set up and maintain undisclosed Swiss bank accounts, which enabled these clients to evade U.S. taxes. In addition, UBS acted as an unregistered broker-dealer and investment adviser from 1999 to 2008, to thousands of U.S. clients while holding billions of dollars in assets for them. UBS allegedly raked in profits of up to $140 million a year from this business.
“UBS avoided compliance with U.S. securities laws for many years, at the same time they were engaged in other illegal conduct, which makes this one of the most egregious cases of its kind," said Scott W. Friestad, Deputy Director of the SEC’s Division of Enforcement in a recent press release.
The SEC alleges that UBS was fully aware that it was required to register with their agency. They believed that UBS lured clients by sending them to exclusive events such as art shows, yacht outings and sporting events, all sponsored by the bank. In addition, client advisors who traveled abroad to the U.S. were given encrypted laptops and were trained on how to avoid detection by authorities.
In addition to the $200 million fine, UBS will settle criminal charges with the Department of Justice in which they will pay an addition fine of $180 million, and another $400 million in tax-related payments.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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Globe and Mail – A U.S. hedge fund with a reputation as an activist investor has become the biggest shareholder in AbitibiBowater Inc., putting added pressure on management at the struggling paper giant to find a speedy solution to its financial woes.
Seattle-based Steelhead Partners LLC revealed in a regulatory filing made Friday that it now holds 14.8 per cent of Abitibi’s shares. The fund has tripled its stake in the debt-heavy newsprint king in recent weeks, jumping to the head of the pack among Montreal-based Abitibi’s shareholders.
Steelhead first said in July that it had acquired 5 per cent of Abitibi’s shares, surpassing the threshold that required it to disclose its holdings under securities laws. Its stake had grown to 10 per cent in early January and almost 15 per cent by the end of the month, according to its most recent filing made with the U.S. Securities and Exchange Commission.
New York Post – The developers of the famed landmark are fighting back following two multimillion-dollar lawsuits filed against them by separate penthouse buyers within the past two weeks.
Developer El-Ad Properties, which renovated the 101-year-old building to include pricey condos, is countersuing Russian hedge-fund manager Andrei Vavilov for damages totaling $36 million after he claimed he was the victim of a bait-and-switch.
Vavilov, 51, who bought adjoining duplex and triplex apartments for $53.5 million, filed a lawsuit against El-Ad and Stribling & Associates brokers for $30 million plus return of his $10.7 million deposit.
On Wednesday, the buyer of a duplex next to Vavilov’s two units – also said to be a hedge-fund manager – filed a similar suit, for $6.5 million.
In the countersuit filed in Manhattan Supreme Court, El-Ad accuses Vavilov of libel and filing a "sham lawsuit."
