Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Friday, March 23, 2007

Criminal Market Timing Charges Brought Against Hedge Fund

The SEC announced today that Beacon Rock  Capital  LLC  (Beacon Rock), a hedge  fund  located  in  Portland,  Oregon,  and  Thomas  J. Gerbasio (Gerbasio), a  former  securities  registered  representative with a registered broker-dealer based in Philadelphia, were criminally charged in connection with a scheme to defraud mutual funds and  their shareholders of approximately $2.4 million. In an Information filed on March 20,  2007,  the  U.S.  Attorney  for  the  Eastern  District  of Pennsylvania (U.S. Attorney) charged that  Beacon  Rock  and  Gerbasio engaged in a scheme to evade and circumvent  controls  implemented  by mutual funds seeking to restrict  market  timing.  This is the first U.S.  criminal  case  against  a hedge fund for deceptive market timing.

http://lawprofessors.typepad.com/securities/2007/03/criminal_market.html

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