CFO.com- The Securities and Exchange Commission filed charges against hedge fund manager Robert A. Berlacher, Lancaster Investment Partners L.P. and eight related entities, alleging that Berlacher engaged in insider trading and an illegal trading scheme involving PIPEs  the acronym for a private investments in public equity.
In charges filed last Thursday, the SEC alleged that from 2000 through 2005, Berlacher, Lancaster and the other entities (including Northwood Capital Partners, Cabernet Partners, Chardonnay Partners, Insignia Partners, VFT Special Ventures, LIP Advisors, NCP Advisors, and RAB Investment Company) took in more than $1.7 million in what amounted to an illegal trading scheme.
According to the SEC, Berlacher, learning about a PIPE transaction, would sell short the issuer’s stock. Once the SEC declared the resale registration statement effective, Berlacher allegedly used the PIPE shares to cover the short positions, a practice that the SEC says is prohibited by the registration provisions of the federal securities laws.
