SEC GETS UK COURT TO IMPOSE ASSET FREEZE AGAINST HEDGE FUND MANAGER
The SEC obtained an asset freeze in the UK against a UK citizen that managed a hedge fund subject to an enforcement action in the U.S. The SEC has a U.S. enforcement action pending against the hedge fund and its two principals, including the UK defendant, in connection with allegations that the fund and its principals made material misrepresentations to investors. The SEC sought, and successfully obtained, an asset freeze issued by the High Court of Justice in London against the UK defendant, who, according to the SEC, controlled the hedge fund manager, a Massachusetts-based investment adviser. The SEC acknowledged cooperation from the FSA (the UK regulator) and the Massachusetts Securities Division.
OUR TAKE: This case shows the ability of regulators to work across jurisdictions to pursue wrongdoers. Running offshore will not necessarily escape the long arm of the law, especially when the SEC has alleged fraud against U.S. investors. The regulators have increasingly demonstrated the ability to cooperate in enforcement actions.