by Mike Caswell
Former fund manager Michael Lauer, cleared last year of any criminal wrongdoing stemming from the overvaluation of his Lancer group of funds, has lost his bid to overturn a $62-million disgorgement order that the U.S. Securities and Exchange Commission obtained against him in May, 2009. (All figures are in U.S. dollars.) In a decision handed down on April 18, 2012, the U.S. Court of Appeals for the Eleventh Circuit has affirmed Mr. Lauer's civil penalty, which the SEC secured after arguing that Mr. Lauer had made tens of millions of dollars while fraudulently overvaluing the Lancer funds.
The fine stems from a scheme Mr. Lauer ran between 2000 and 2003, in which he manipulated the closing prices of OTC Bulletin Board and pink sheets companies in a bid to boost the values of his funds. One of the stocks held by the purported $1.1-billion group of funds was former Toronto Stock Exchange listing Zi Corp. At one point, the Lancer funds had acquired approximately half of the company's outstanding shares.