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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation?
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To: pcyhuang who wrote (2873)10/11/2007 5:00:04 PM
From: rrufff  Read Replies (1) of 5034
 
Slap on the wrist and a look into the manipulative world of hedge funds' shorting.

DJ ) 10/10 12:39PM DJ SEC Fines Hedge Fund Over Post-Katrina Short Sales
By Michael R. Crittenden
OF DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The Securities and Exchange Commission said
Wednesday it had reached an $8 million settlement with hedge fund adviser
Sandell Asset Management Corp. over improper short sales made in the wake of
Hurricane Katrina.

The SEC said the firm moved aggressively in the days after the storm to sell
short its Hibernia holdings because of concerns that Capital One Financial
Corp. (COF) would lower its proposed acquisition price for the New
Orleans-based bank because of the massive damage to the area.
In doing so, however, the commission said the New York-based fund had
improperly marked certain sales of Hibernia Corp. shares as "long", even
though the fund was selling the shares short.
Additionally, the commission said Sandell personnel had lied to the
broker-dealers executing additional trades that they had located Hibernia to
borrow to make the trades.

"By mismarking certain trades and falsely claiming that firm personnel had
located stock to borrow, Sandell Asset Management gained an unfair trading
advantage over other market participants," said Scott W. Friestad, associate
director of the SEC's division of enforcement.

Sandell Asset Management and its top executives agreed to pay more than $8
million to settle the charges, though neither the firm nor its personnel
admitted admitting or denying wrongdoing. The settlement included a civil fine
of $650,000 for the firm, and a penalty of $190,000 for top executives,
including CEO Thomas Sandell.

-By Michael R. Crittenden, Dow Jones Newswires; 202-862-9273;
michael.crittenden@dowjones.com
(END) Dow Jones Newswires
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