Hedge Funds

SEC alleges fraud and soft dollar abuse at Fountainhead


The U.S. Securities and Exchange Commission this week ordered Anthony Postglione and William Lennon, principals at Pennsylvania-based Fountainhead Asset Management, to stop trading their three-year-old hedge fund.

Fountainhead and its principals are accused of defrauding investors by allegedly sending out bogus quarterly statements with false performance information, according to the SEC. And, in one of the more interesting aspects of the case, regulators claim that the duo "excessively traded" several investor accounts in the fund for the sole purpose of generating soft-dollar credits to line their pockets.

Although it is not clear how large the Fountainhead Fund had been at