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.
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