Hedge Fund Trader Pleads Guilty to Role in Penny Stock Scheme

Colin Heatherington, a trader for a group of hedge funds, has pleaded guilty to participating in a scheme to manipulate penny stock prices to inflate reported profits, the Justice Department said Thursday.

Heatherington pleaded guilty before US District Judge John A. Kronstadt to one count of conspiring to commit securities fraud and wire fraud, according to the DOJ. He is scheduled for a sentencing hearing May 9.

He admitted to his role in a scheme involving Absolute Capital Management Holdings, which is a Cayman Island-based company that managed eight hedge funds from offices in Mallorca, Spain, the DOJ said. ...