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by Mike Caswell

The U.S. Securities and Exchange Commission has filed civil fraud charges against two traders and a hedge fund manager for a $63-million market manipulation scheme. (All figures are in U.S. dollars.) The defendants, which include Victoria resident Colin Heatherington, used hedge fund accounts to buy up millions of shares in thinly traded stocks. At the same time, they sold shares of those companies from other accounts they controlled, fraudulently making millions, the SEC claims.

The charges are contained in a complaint the SEC filed against Mr. Heatherington and two others on Feb. 24, 2011, in the Central District of California. The manipulations, as described by the complaint, took place between 2005 and 2007 and affected eight hedge funds controlled by Absolute Capital Management Holdings Ltd. of London. The defendants include Florian Homm, a citizen of Spain who was the chief investment officer of Absolute Capital. The SEC identifies Mr. Heatherington as a trader who worked under Mr. Homm.

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