Hedge fund charged by SEC with making up valuations

WASHINGTON (MarketWatch) -- A Greenwich, Conn.-based investment advisory firm and its two owners were charged by the Securities and Exchange Commission with fraudulently inflating the prices of securities in hedge fund portfolios they managed. AlphaBridge Capital Management told investors and its auditor that it obtained independent price quotes from broker-dealers for certain unlisted, thinly-traded residential mortgage-backed securities, but instead gave internally-derived valuations to broker-dealer representatives to pass off as their own, the SEC alleged. AlphaBridge and its owners Thomas T. Kutzen and Michael J. Carino agreed to pay a total of $5 million to settle the charges. AlphaBridge, Kutzen, and Carino neither admitted nor denied the findings.

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