The Securities and Exchange Commission sued New York hedge fund Colonial Investment Management in federal court Monday, charging the company with making more than $1.48 million from illegal trades, the Associated Press reports.

The SEC said the firm purchased registered offerings to cover short sales it bought within five business days prior, which is not allowed.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.