Anthony P. Postiglione, Jr. and William J. Lennon

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19885 / October 25, 2006

GRAND JURY INDICTS PRINCIPALS OF FOUNTAINHEAD HEDGE FUND ON FRAUD CHARGES, Civil Action No. 04-cv-3604 (E.D.PA).

United States v. Anthony P. Postiglione, Jr. and William J. Lennon (E.D. Pa.)

The Securities and Exchange Commission announced today that on October 12, 2006, Anthony P. Postiglione, Jr. ("Postiglione") and William J. Lennon ("Lennon"), the principals of Fountainhead Asset Mangement, LLC ("FAM"), the investment adviser they founded and which served as investment adviser to the Fountainhead Fund, LP (the "Fund"), were indicted by a grand jury convened by the United States Attorney for the Eastern District of Pennsylania.

The twenty count criminal indictment charges Postiglione and Lennon with misrepresenting the risks of the Fund to the early investors; and creating and sending to investors false and misleading account statements and newsletters that represented the Fund was making money, when it was not. According to the indictment, Fund investors, who never received accurate quarterly statements throughout the time of their investment, lost almost $2 million. In addition, Postiglione is charged with obstruction of justice based on allegations that, in August 2004, intending to obstruct the criminal investigation, he knowingly falsified a document. If convicted, Postiglione faces a maximum of 385 years imprisonment, 3 years of supervised release, and a $4,760,000 fine; Lennon faces a maximum 365 years imprisonment, 3 years of supervised release, and a $4,510,000 fine.

Previously, in July 2004, the Commission filed an enforcement action and obtained emergency relief, including an asset freeze and the appointment of a receiver for the Fund, against Postiglione and Lennon.

In September 2005, the Commission settled its case with the defendants. Postiglione and Lennon each consented to the entry of a Final Judgment, permanently enjoining them from further violations of Section 17(a) of the Securities Act, Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act. In addition, Postiglione and Lennon agreed to waive their right to withdraw from the Fund any assets each had personally invested, which assets were valued, by the Receiver appointed by the Court, at $181,653.72 and $8,719.60, respectively. These assets remained in the Fund to be paid to Fund investors in accordance with the distribution plan approved by the Court. Immediately thereafter, also in September 2005, the Commission barred Postiglione and Lennon from association with any investment adviser.

Additional information may be found in Litigation Release No. 18824 and Investment Advisers Act Release Nos. 2432 and 2433.