Reuters reports that hedge fund manager Lewis Chester, who runs U.K.-based Pentagon Capital, has been ordered to pay a $76.8 million dollar fine by U.S. Federal Judge Robert Sweet.
The case was originally brought by the SEC and is the result of a probe initiated by then-New York State Attorney General Eliot Spitzer.
The offence? Improperly trading mutual fund shares after hours, a practice known as “late-trading.”
Lewis’ emails berating brokers for not executing on his late trades played a large role in his conviction, with one ultimately providing what appeared to be an acknowledgement that he attempted to engage in late trading. After missing one late trading opportunity, Lewis reportedly sent an email that closes with the conclusion that “we f***** up last night.”
Here are excerpts from the emails Lewis sent to brokers (from The Telegraph):
“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).”
[He complained of the] “pathetic, pittiful (sic) moaning that I’ve been subjected to for years …”
“I really EXPECT you guys to go out of your way to make sure I get late trading …”
[After missing a late trading opportunity, an email] closed with the conclusion: “We ****** up last night.”
Lewis’ lawyers have said that they plan to appeal the ruling.