I don’t want to keep bringing up Ritchie Capital news, because this doesn’t have much relation to the Life Settlement Industry, however it is important because their are still involved in a lawsuit with Coventry (one of the largest purchasers of Life Settlements).
Hedge fund Ritchie Capital Management has reached a $40m (27.3m) settlement with the US Securities and Exchange Commission over charges it engaged in late trading in mutual funds, one of the largest settlements of its kind to date.
The regulator alleged that Ritchie Capital engaged in illegal late trading from the start of 2001 to September 2003, placing thousands of trades in mutual fund shares using information obtained after the market closed. The trades were made on behalf of Ritchie’s global multi-strategy fund.
The late trades were placed with CIBC World Markets, Trautman and with Bear Stearns Electronic Platform. Order tickets used in the late trades were stamped with pre-4pm time-stamps, concealing the actual time of the trades, according to the SEC.
As part of the settlement Ritchie Capital neither admitted nor denied the SEC’s findings. The firm and its multi-strategy fund have one week to pay a $30.7m fine and an additional $2.5m civil penalty to the SEC.
Thane Ritchie, the chief executive of Ritchie Capital and Warren DeMaio, who was responsible for mutual fund oversight at the firm, were singled out in the settlement and accused of fraudulent conduct. DeMaio was handed a $250,000 fine.
Ritchie Capital has an ongoing $2bn lawsuit with life settlement business Coventry First. The suit alleges that Coventry committed fraud, breach of fiduciary duty and breach of contract stemming from an agreement to invest in life insurance products in 2005.
Separately, the SEC has created a new office to efficiently distribute financial penalties to out of pocket investors. The Office of Collections and Distributions will distribute over $5bn the SEC has recovered from securities law violators, according to the regulator.
Source: Financial News Online
Other Ritchie Capital and Coventry Lawsuit Posts:
Ritchie sells insurance assets to ABN, Bear Affiliate
Ritchie Unit and Coventry Reach Deal
Life Settlement Hedge Fund Auction
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