The US Securities and Exchange Commission (SEC) announced on Monday that it has taken legal action to close down the operations of a Philadelphia-based hedge fund and to freeze the assets of the fund's two principals.
According to the SEC, Anthony Postiglione and William Lennon, partners in Fountainhead Asset Management, misappropriated hundreds of thousands of dollars in fund assets for their own personal use, overstated their own investment in the fund, and "sent false quarterly statements and newsletters to investors, consistently overstating the fund's value and performance".
Ruling earlier this week in the US District Court for the Eastern District of Pennsylvania, Judge Legrome Davis issued the order freezing the assets of the two men, appointed a receiver, and scheduled a hearing of the case for Thursday.
Responding to the charges, Postiglione's attorney, Gregory Stagliano told Reuters that they were "without merit", continuing:
"At the appropriate time, we will contest them vigorously. For now, we intend to cooperate with the court-appointed receiver to ensure that all of the investors' assets are protected."
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