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Alternative Market Briefing

SEC agrees to dismiss six year old case against Gabelli’s CIO

Friday, July 04, 2014

Benedicte Gravrand, Opalesque Geneva:

In the midst of the credit crisis, Gabelli Funds had another beast to contend with: claims of market-timing abuses by the Securities and Exchange Commission (SEC).

According to Bloomberg, Marc Gabelli, 40, the son of the company founder Mario Gabelli, and Chief Operating Officer Bruce Alpert, 56, allegedly allowed in 1999-2002 London-based Headstart, then known as Folkes Asset Management, to triple its market-timing capacity in exchange for an investment in another Gabelli hedge fund. Gabelli Funds LLC (aka GAMCO), a $43 billion, public mutual and alternative funds management firm, agreed to pay $16 million to settle the claims.

According to the SEC’s summary, its April 2008 complaint alleged that a hedge fund (Headstart/Folkes) had been "authorized to place market timing trades in the Gabelli Global Growth Fund (GGGF), a fund advised by Gabelli Funds, in exchange for an investment in a hedge fund advised by an affiliate of Gabelli Funds. The complaint also alleged that Alpert wrote a memorandum in September 2003 that was designed to assure investors that Gabelli Funds did n......................

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