U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21108 / June 29, 2009

Securities and Exchange Commission v. Headstart Advisers Limited, et al., 08 CV 3484 (S.D.N.Y.)

Commission Settles with Najy N. Nasser, Headstart Advisers Limited and Headstart Fund Ltd. in Connection with Deceptive Market Timing and Late Trading Scheme

The Commission announced today that, on June 23 and 26, 2009, the United States District Court for the Southern District of New York entered final judgments by consent against Najy N. Nasser, Headstart Advisers Limited (HAL) and Headstart Fund Ltd. in a mutual fund late trading and deceptive market timing civil injunctive action. The final judgments enjoin Nasser and HAL from future violations of the antifraud provisions of the federal securities laws and order them to pay civil monetary penalties of $600,000 and $200,000, respectively. In addition, the final judgment orders the relief defendant, Headstart Fund, to pay disgorgement of $17 million.

The Commission filed its Complaint in this matter on April 10, 2008. The Commission's Complaint alleged that from approximately September 1998 through September 2003, the Headstart Fund, a hedge fund incorporated in the Bahamas, acting through its United Kingdom investment adviser, HAL, engaged in fraudulent late trading and deceptive market timing of U.S. mutual funds through accounts at U.S. broker-dealers. Nasser, HAL's Chief Investment Adviser, provided instructions to, or otherwise communicated with, personnel at U.S. broker-dealers to direct Headstart Fund's late trading and deceptive market timing scheme.

Without admitting or denying the allegations in the Commission's complaint, Nasser and HAL consented to judgments entered by the Court that permanently enjoin them from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The judgments orders Nasser and HAL to pay civil monetary penalties of $600,000 and $200,000, respectively. Finally, in late 2003, the Headstart Fund distributed the substantial part of its assets to its investors. Without admitting or denying the allegations in the Commission's complaint, the Headstart Fund has now consented to a judgment that orders it to pay $17 million in disgorgement.

For further information, please see Litigation Release Number 20524 (April 10, 2008)