Hedge Fund Boss Whose Explosive Emails Finally Caught Up With Him

A UK hedge fund run by a close ally of David Cameron and a donor to the Conservative Party has been ordered to pay $76.8m (£48.9m) after being found guilty of market abuse in the US.

By Jonathan Sibun

“Poor souls, working past cookie and milk time…for once in your lives, you can work like real men and do a proper day’s work. (You really are a bunch of women of the first order).”

Wednesday was the day when the cookie finally crumbled for Lewis Chester.

A former contemporary of David Cameron’s at Oxford University and once considered one of Britain’s richest financiers, Mr Chester’s hedge fund was on Monday evening found guilty of market abuse in the US and ordered to pay a $76.8m (£48.9m) penalty.

The judgment – which Mr Chester plans to appeal against – looks likely to bring to a close a near four-year battle by the US Securities and Exchange Commission (SEC) to pin Pentagon Capital Management down for abusive mutual fund trading. The case, which heard from 18 witnesses and was labelled “complicated and controversial” in an opinion handed down by Judge Robert Sweet, followed allegations concerning trading between 1999 and 2003.

The judge found that Pentagon had engaged in so-called “late trading”, a term used to describe the practice of placing orders for mutual fund shares after the close of trading. Late trading is illegal in the US because it allows the subject to profit from market events that occur after trading closes.

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