June 15, 2016

The SEC charged hedge fund manager Christopher Plaford with trading on inside information received from Sanjay Valvani regarding anticipated drug approvals and from a former CMS official about impending cuts to Medicare reimbursement for certain home health services.  Plaford allegedly made $300,000 by trading based on insider information in hedge funds he managed.  Separately, the SEC charged Stefan Lumiere and Plaford with falsely inflating the value of securities held by a hedge fund managed by their firm.  Over an 18-month period, Lumiere used sham broker quotes to mismark as many as 28 securities per month, surreptitiously passing along his desired prices to brokers via his personal cell phone or a flash drive delivered by courier.  The fund consequently reported artificially inflated returns and monthly net asset values and paid out more than $5.9 million in inflated management and performance fees to its investment adviser.  SEC

Tagged in: Insider Trading, Securities Fraud,