The SEC today announced it charged four principals of Beacon Hill Asset Management with fraud as the agency expands its case against the hedge fund manager. John D. Barry, president; Thomas P. Daniels, CIO; John M. Irwin, senior portfolio manager; and Mark P. Miszkiewicz, CFO, are accused of implementing a scheme to cover up more than $300 million in hedge fund losses during the first nine months of 2002. The funds had been invested primarily in collateralized mortgage obligations. The four principals allegedly misrepresented to the firm's clients the methodology used to calculate the funds' net asset values, the hedging and trading strategy of the so-called market-neutral funds, the funds' assets value and their performance. The four Beacon Hill principals were also charged with alleged self-dealing in connection with the hedge funds and with allegedly selling bonds from two hedge funds managed for institutional clients Lehman Brothers and Societe Generale to the other hedge funds in its family, substantially benefiting the performance of the sellers' accounts. The wives of the four principals were also charged as relief defendants.
The SEC seeks civil penalties, a permanent ban on each of the four Beacon Hill officers from the industry, and a return of any gains received from the scheme plus interest.
A spokesman for Beacon Hill said none of the firm's executives were available for comment.
The SEC filed its original fraud complaint against the firm in November 2002.