Southridge Hedgie Hicks Shrugs Off Regulators Investor Fraud Suits
Teri Buhl, 26 October 2010
Stephen Hicks and his Ridgefield, CT hedge fund, Southridge Capital, were sued yesterday for multiple securities violations by the SEC and the Connecticut Banking Commissioner in Connecticut state and federal courts. Howard Pitkin, head of the CT Department of Banking, has been after Hicks for investor fraud and abuse in its broker dealer business since 2007.
Hicks is fight back- after being ordered to comply with a subpoena from the Banking Commission, Southridge then appealed to the Connecticut Supreme Court but Pitken eventually won the right to review the funds internal records. Pitkin had originally filed a cease and desist order against the broker dealer side of the hedge funds business. Now he wants to shut the whole Southridge opperation down.
Obviously, the SEC and the CT Department of Banking were cooperating in the investigation which was filed on the same day. But this seasoned hedgie, who started his fund in 1996, is telling fund employees he’s not worried.
According to a portfolio manager who’s currently working for Southridge, Hicks told staffers ‘the charges won’t stick’. He says these are old complaints and not indicative of current actions. People involved in the Banking investigation say Hicks came to the negotiation table in the last year but didn’t offer anything the Commissioner thought was acceptable. So he choose to go after the fund with serious civil charges that detail years of securities violations
