WEST PALM BEACH, FL (www.hedgeco.net) – Hillary Shane, a hedge fund manager formerly registered with First New York Securities, L.L.C. (FNY), has been barred from associating with the NASD. Shane isalso to pay $1.4 million to settle the charges of fraud brought against her by the U.S. Securities and Exchange Commission {SEC}. The SEC also charged Shane with insider trading and fraud involvinghis trades in Pipe Transaction deals.
PIPE deals involve a private offering in which, �Accredited investors agree to purchase restricted, unregistered securities of public companies.� Investors purchasing such deals may only sell them after the shares are registered and then approved by the SEC. Pipe shares may only be purchased by accredited investors meeting SEC rules.
Shane was also permanently barred from affiliations with NASD, and she is also to pay a fine of $375, 000 to NASD as well. The SEC also imposed sanctions on Shane as well; she was given a one year suspension by the SEC, with an injunction issued to him from any further violations of the U.S. Securities law. The SEC also levied a disgorgement fine of more than $296,000 from ill-gotten trades, $356,000 in ill-gotten profits from selling unregistered shares, and additional fines of 356,000 and $125,000 for a total fine of more than $1.4 million.
NASD Vice Chairman Mary L. Schapiro said, “This case is part of NASD’s ongoing commitment to dealing with abuses in the marketing and trading of PIPE shares.� Shapiro further said, “These abuses are serious and warrant serious sanctions.”
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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