four year-old investigation has ended with Ron Baron
, founder of Baron Capital, agreeing to pay a fine of $500,000. His fund firm will pay another $2 million in fines and two traders will pay a total of $200,000 in fines.
The payments settle allegations that Baron had the two traders to manipulate the closing price of Southern Union shares over a ten-day period in 1999. The alleged rigging happened as Southern Union was merging with Pennsylvania Enterprises in a deal in which the price was dependant on the average closing price of Southern Union.
Unfortunately for Baron, conversations between the two Barons the traders, David Schnieder and Susan Blenke, and the NYSE order clerk handling the deal were caught on tape. Those tapes were the centerpiece of the SEC's case. The SEC is continuing to investigate the actions of a New York Stock Exchange order clerk who was involved in the trades.
Baron funds held roughly 10 percent of Southern Union stock during that time, according to published reports.
While Schnieder agreed to pay a $125,000 fine and Blenke a $75,000 fine, none of the parties involved (including Baron) admitted any guilt. Nor did the SEC take the step of barring any Baron employees from the industry.
"After extensive discussions with the SEC staff, Baron Capital decided not to contest their view and to settle the matter without admitting or denying the SEC's findings," said Baron officials in a statement.
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