Lake Hill Capital Management

Lake Hill Capital Management was an options-trading firm whose founder was barred by the SEC in 2019 for misusing exchange order data.

Lake Hill Capital Management

Lake Hill Capital Management, LLC is a private asset management firm that was founded in 2005 and specializes in quantitative and relative value strategies in derivatives and underlying securities markets. Lake Hill has partnered with both institutions and high net-worth families to provide investment solutions using our flagship products as well as custom tailored portfolios.

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General information

Firm type

Asset Manager

Year founded

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AUM

Undisclosed

Location

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Country

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City

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Corporate office

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What regulatory action did the SEC take against Lake Hill Capital Management?

In 2017, the SEC charged Lake Hill and its founder with fraud, alleging the firm used confidential customer order information from the International Securities Exchange to trade for its own account ahead of those orders. The firm's exchange access had been revoked in 2013, and by 2019 the SEC settlement permanently barred its principal from the securities industry and imposed financial penalties (per SEC orders, 2017-2019).

Who ran investment and trading decisions at Lake Hill?

The firm was managed by its founder and majority owner. According to the SEC's complaint, this individual directed the firm's trading strategy, oversaw the misuse of exchange order information, and later signed the settlement that included a permanent industry bar.

What investment strategy did Lake Hill Capital Management pursue?

Lake Hill operated as a proprietary options-trading firm, concentrating on exchange-listed equity options. It functioned as both a market maker and a proprietary trader, meaning it earned revenue from bid-ask spreads and directional bets, with a focus on the International Securities Exchange until its access was revoked in 2013.

Does Lake Hill Capital Management still operate?

No. The firm effectively ceased operations following the revocation of its exchange access in 2013 and the subsequent SEC enforcement action. Its founder was permanently barred from the industry in 2019, and the entity has no known ongoing investment activity.

How did Lake Hill access the customer order information cited by the SEC?

As a registered broker-dealer and market maker on the International Securities Exchange, Lake Hill received detailed, real-time data feeds showing pending customer orders. The SEC alleged that the firm exploited this data to place proprietary trades that anticipated those orders, violating the duty to safeguard confidential trade information.

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