New York (HedgeCo.net) – The SEC has charged two securities professionals, a hedge fund trader, and two firms involved in a scheme that manipulated several U.S. microcap stocks and generated more than $63 million in illicit proceeds.
The SEC recorded hundreds of supposedly secure instant messages (IMs) sent between Hunter World Markets Inc. and the London-based hedge fund manager Absolute Capital Management Holdings Limited (ACMH).
“By manipulating U.S. stocks through a U.S. broker-dealer, they defrauded investors in offshore hedge funds and reaped millions of dollars from their illicit activities.” Rosalind R. Tyson, Director of the SEC’s Los Angeles Regional Office, said.
The SEC alleges that Florian Homm of Spain and Todd M. Ficeto of Malibu, Calif., conducted the scheme through their Beverly Hills, Calif.-based broker-dealer Hunter World Markets Inc. with the assistance of Homm’s close associate Colin Heatherington, a trader who lives in Canada.
“They brought microcap companies public through reverse mergers and manipulated upwards the stock prices of these thinly-traded stocks before selling their shares at inflated prices to eight offshore hedge funds controlled by Homm.” The SEC said.
The manipulation of the stock prices allowed Homm to materially overstate by at least $440 million the hedge funds’ performance and net asset values (NAVs) in a fraudulent practice known as “portfolio pumping.”
Alex Akesson
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