A U.K.-based investment fund has agreed to pay $170 million as part of a settlement with the Securities and Exchange Commission (SEC) for allegedly violating anti-fraud provisions of U.S. securities laws.
According to the SEC, BlueCrest Capital Management, based on the isle of Jersey, failed to disclose to investors the existence of a $1.5 billion hedge fund owned by executives, called BSMA Limited. The BSMA fund poached top traders from BlueCrest’s main investment fund, then replaced them with a computer algorithm that underperformed compared to live traders. The arrangement created numerous conflicts of interest that were not disclosed while also harming investors in BlueCrest’s main fund, the SEC said.
