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A former hedge fund portfolio manager agreed to a permanent bar from the securities industry for allegedly mismarking certain securities in order to improperly inflate their value.
The SEC's complaint alleged that former hedge fund portfolio manager Stefan Lumiere inflated the value of the distressed-debt holdings of a private fund under his management by using sham broker quotes generated in coordination with outside brokers. Mr. Lumiere was accused of colluding with another portfolio manager to routinely obtain overvalued quotes for securities held by their fund, leading to (i) overstated month-end net asset values, (ii) the misclassification of certain distressed assets and (iii) the collection of outsized management and performance fees.
The SEC charged Mr. Lumiere with violating Exchange Act Section 10(b) and Rule 10b-5, Advisers Act Sections 206(1), (2) and (4), and Rule 206(4)-8.
Mr. Lumiere previously was convicted criminally for the same misconduct. He was sentenced to 18 months in prison and a $1 million fine.
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