Securities and Exchange Commission Charges Clarion Management LLP and Its Hedge Fund Manager With Involvement In Alleged Market Timing Scheme

The SEC is charging Clarion Management LLP and its hedge fund manager, John Fife, with allegedly buying variable annuity contracts, with the intention of taking part in market timing in mutual funds on behalf of the hedge fund.

According to the SEC, in their lawsuit filed in the U.S. District Court of the Northern District of Illinois on January 18, Fife and Clarion Management allegedly made hundreds of thousands of dollars in profits at the expense of other shareholders. The Securities and Exchange Commission wants the court to order disgorgement plus prejudgment interest, injunctive relief, and civil penalties.

The SEC claims that Clarion Management and Fife allegedly took part in a fraudulent scheme to buy variable annuity contracts issued by the Lincoln National Life Insurance Company for Clarion Capital LP. The purpose of these purchases was to take part in market timing. The SEC says that Clarion Capital was created to market time international funds through variable annuities and that Clarion Management and Fife engaged in deceptive methods to buy contracts and take part in market timing to benefit Clarion Capital. One example the SEC cited was that of Clarion Management and fife using limited liability companies and trusts as nominee beneficiaries and contract owners to cover up the fact that Clarion Capital had a financial interest in the variable annuity contracts.

The SEC claims that Clarion Management and Fife continued to engaged in these fraudulent actions until Lincoln National noticed what they were doing and imposed specific trading restrictions on them. In response, Clarion Management and Fife made the trusts give up the contracts and tried to disguise the fact that they were buying more variable annuity contracts.

An attorney for Fife and Clarion Management says that they believe the SEC is making its claims because it wants to regulate insurance product sales-in particular, variable life annuities. Fife and Clarion Management are denying the allegations by the SEC.

Shepherd Smith Edwards & Kantas LTD LLP is a law firm committed to helping investors recover losses that are a result of misconduct by people in the investment industry. To recover their losses, however, investors must file claims for their recovery. Statistics show that investors are more likely to recover their loses if they are represented by an experienced lawyer. Contact Shepherd Smith Edwards & Kantas LTD LLP to schedule your free consultation.

Related Web Resources:

SEC v. John M. Fife and Clarion Management, LLC, The Complaint (PDF)

Lincoln Financial Group