The Securities and Exchange Commission has filed a complaint against hedge fund manager John Fife for allegedly market timing variable annuity contracts, according to HedgeFund.net Fife ran Clarion Capital, which purchased annuity contracts from Lincoln National Life Insurance from 2002 to 2003. The SEC alleges Fife used deceptive tactics to purchase the contracts and engaged in market timing to further Clarion’s profits.
During this time Fife supposedly used trusts and limited liability companies to conceal the financial interest in the contracts. He also created 17 family trusts, each one was named using the first 17 letters of the alphabet.
Jason Slezak says he asked Fife about the source of the money used to purchase the Lincoln contracts, and Fife allegedly responded by saying he was investing money for his family members whose names appeared in the titles of the trusts.
The SEC claims Fife also used other deceptive means like using previously unused trusts and limited liability companies. Clarion made about $830,000 from these transactions. The SEC’s complaint says Fife set up Clarion for the sole purpose of engaging in market timing. The memorandum state Fife’s plan and says he admitted that Clarion’s actions “can be seen as diluting the interests” of other shareholders.