The adviser of a Boston hedge fund that issued convertible notes lost its bid to escape a Securities and Exchange Commission lawsuit alleging that it acted as an unregistered securities dealer.
The hedge fund, Auctus Fund LLC, made more than $100 million by converting the debt into stock and selling those shares into the market at a discount, the SEC alleges. The SEC says the activity made the fund’s adviser, Auctus Fund Management LLC, a dealer under federal securities law.
Judge Angel Kelley in the US District Court for the District of Massachusetts allowed the case to move forward Monday. ...
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