Scalper fined, banned from trading by the SEC

Discussion in 'Wall St. News' started by buzzy2, Dec 2, 2005.

  1. Scalper punished for trying to take business away from the big banks. Only Goldman, Morgan, Deutsche, Lehman et al allowed to pump and dump.

    CEOs throwing away shareholders money pumping and dumping their own stock 100% legit also.

    ‘Scalper' Settles With SEC

    By Chris Clair, Senior Financial Correspondent | Thursday, December 01, 2005

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    WASHINGTON (—According to the Securities and Exchange Commission, Berton M. Hochfeld was a scalper.
    But he wasn't outside the ballpark selling box seats to White Sox World Series games. "Scalping," in the SEC's lingo, means he was trading securities for a hedge fund he ran in a way that contradicted advice he was giving to investors in research reports he wrote as an analyst for First Montauk.

    In a settlement announced Tuesday [Nov. 29], Mr. Hochfeld agreed to repay US$77,915 in gains he made from the trades, plus US$5,545 in interest, plus another US$75,000 in civil penalties. He neither admitted to nor denied the charges contained in a Nov. 23 SEC complaint.

    According to that complaint, Mr. Hochfeld owned, managed and directed trading for a hedge fund, Hepplewhite Fund LP, via his own management company, Hochfeld Capital Management LLC. At the same time, he was working as a research analyst for First Montauk. As part of that job he followed companies in the enterprise software sector and wrote research reports that First Montauk sent to its institutional customers.

    Between March 27, 2003 and Dec. 15, 2003, those reports, according to the SEC complaint, failed to mention that the Hepplewhite fund had positions in the same stocks Mr. Hochfeld was writing about in the First Montauk research reports, and also failed to disclose that often Mr. Hochfeld would often sell shares of those stocks right after recommending them in the reports he wrote, thereby taking advantage of the price run-up that resulted from the positive recommendations in the reports.

    The SEC alleged that Mr. Hochfeld violated certain provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The settlement also bars him from future violations of those provisions.
  2. nlslax


    Why not?
    The newsletters have been doing it forever.

    If he was in fact frontrunning, then he got what was due him.

    I always said that a securities license is a "license to be sued."
  3. Regulation FD.
  4. not the traditional definition of a scalper....

    also, that's why research reports are almost always useless. too much conflict of interest.
  5. Collective 2,a site you guys may know about,provides subscriptions to different trader's market calls.So if one takes on a position in a security,and then posts it to the site for their subscribers to see,is that illegal?
  6. nlslax


    I'm guessing it would not be illegal, as long as the subscribers knew that the trader may already be in the stock.

    It's a no win game. Even with full disclosure, sooner or later somebody is gonna drop a dime and file a complaint.
  7. 75k? Piker.

    Who they kidding,
  8. 75k...


    They're kidding right??

    Wonder what it cost to investigate this sensational travesty?
  9. I'm surprised you are complaining about this.

    It is a clear violation.
  10. ===========
    Does seem to be clear;
    especially since he worked @ hedge fund,
    and as securities analyst, he knew or should have known.

    Also when someone like an elitetrader mentions a stock;
    always assume myself they have a long or short position in it.

    Think the SEC is one of the better gov agencies;
    they do mention that 1933, 1934 law a lot.
    Probably wanting to send a message;
    like a cop in a school zone will ticket speeders no matter what it cost the cop.:cool:
    #10     Dec 3, 2005