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SEC sanctions adviser, CCO over undisclosed speculation

Dec 24 2012 Stuart Gittleman, Compliance Complete

The Securities and Exchange Commission on Friday sanctioned Top Fund Management, Inc., an investment adviser to a mutual fund, and Barry C. Ziskin, its sole control person, for breaching their fiduciary duty and misrepresenting their use of options trading. The SEC's analysis of whether options trading is a legitimate hedging strategy or is speculative in nature may serve as a model for other alleged deviations from investment strategies. Without admitting or denying the SEC's findings, the respondents consented to being ordered to cease and desist from violating Section 17(a) of the Securities Act of 1933; Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5; Sections 206(1), (2) and (4) of the Investment Advisers Act of 1940 and Rule 206(4)-8(a); and Sections 13(a)(3) and 34(b) of the Investment Company Act of 1940. Also, Top Fund agreed to be censured and Ziskin, who during part of the relevant period was also the firm's chief compliance officer, agreed to be

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