Hedge fund Beacon Hill Asset Management and four of its top executives settled with the Securities and Exchange Commission for $4.4 million stemming from fraud charges, the Commission announced.
In addition, the four executives have been barred from the investment advisory business. The principals President John Barry, CIO Thomas Daniels, Senior Portfolio Manager John Irwin and Chief Financial Officer Mark Miszkiewicz will pay, respectively, $1.2 million, $1.5 million, $750,000 and $400,000. Only Miszkiewicz will have the opportunity to ever be reinstated into the business, but he will not be allowed to reapply for four years.
Beacon Hill investors have allegedly lost more than $300 million since 2002 because of a scheme devised by the company that "misrepresented and manipulated its valuation procedures for Beacon Hill Master, Ltd.," which was the firms top hedge fund.
Then, the company, without telling investors, allegedly made a secret bet that interest rates would rise. The firm hid its losses, and some of the principals made secret deals to sneak their way out of the investments.
Neither the individuals nor the firm were forced to admit or deny the allegations. The settlement came just two days after the SEC made another key decision regarding hedge funds: a new rule requiring them and their advisors to register with the Commission.