British hedge fund Pentagon fined in US for 'late trading'

The British hedge fund Pentagon Capital and its chief executive, Lewis Chester, have been ordered by a US judge to pay $77m (£49m) after "intentionally and egregiously" engaging in illegal "late trading" or making mutual fund trades after the market had closed, but at stale prices.

The trial on civil charges formed one of the last cases connected to a US regulators' investigation into mutual funds launched in 2003. However, the judge separately rejected SEC's claim that Pentagon engaged in fraudulent "market timing".

A lawyer for Pentagon, which is winding down, said the firm would appeal.