SEC fines Ritchie hedge fund $40 million
The hedge fund, its adviser, founder and two employees will pay a combined $40 million for an illegal late-trading scheme.
Hedge fund Ritchie Multi-Strategy Global Trading, its adviser, founder and two employees will pay a combined $40 million for their roles in an illegal late-trading scheme.
The fund’s adviser was Ritchie Capital Management LLC, and the founder of the firm was A.R. Thane Ritchie.
The fine, levied by the Securities and Exchange Commission, will be distributed to the affected mutual funds.
The SEC’s order found that between January 2001 and September 2003, Ritchie Capital placed thousands of late trades in mutual funds and used news and market information after 4 p.m. EST to make its mutual fund trading decisions while receiving the same day’s net asset value for the mutual funds traded.
“This action demonstrates the Commission’s willingness to take strong action against hedge fund advisers and their employees when they violate the federal securities laws,” said Linda Chatman Thomsen, director of the SEC’s Division of Enforcement, according to a statement. “Here, respondents did so by engaging in illegal late trading in mutual funds.”
Learn more about reprints and licensing for this article.
