Massachusetts Commences Civil Securities Fraud Enforcement Action against Hedge Fund Investment Adviser Risk Reward Capital Alleging that the Hedge Fund Traded on Inside Information Provided through an Expert Network

On March 9, 2011, the Enforcement Section of the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth filed an administrative complaint against investment adviser Risk Reward Capital Management Corp., the hedge fund it advised, the fund’s general partner and their principal.  This article summarizes the Division’s allegations, which constitute the first state-level enforcement efforts in the unfolding investigation of alleged insider trading in connection with the use of expert networks by hedge fund managers.

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