Rockies Fund, a business development company (a type of closed-end fund), and its president, Stephen Calandrella, were recently found to have falsely valued the fund's holdings and to have manipulated stock prices. In a decision handed down March 9, Judge Brenda Murray ruled that Calandrella had manipulated the price of the stock of a small costume jewelry store chain, Premier Concepts. Judge Murray also found Rockies Fund had overvalued the fund when it did not discount restricted shares of Premier Concepts stock the fund owned.

Judge Murray, an SEC administrative law judge, found Calandrella had engaged in wash trades and match orders in order to push the price of Premier Concepts stock higher. She found that the timing and circumstances of these transactions were sufficient to find intentional manipulation of the price of premier stock by Calandrella and his friend, John Power who ran another fund, Redwood MicroCap Fund. In addition, she found that Rockies Fund should have discounted the Premier stock in the fund, since almost all of it was restricted. Generally, restricted stock is less valuable than unrestricted stock because restricted stock does not trade on the open market.

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