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James Sutton Regan
Managing General Partner of Princeton/Newport Partners; Convicted on 63 RICO Counts, All Overturned on Appeal
Managing General Partner, Princeton/Newport Partners
Overview
James Sutton Regan was the managing general partner of Princeton/Newport Partners, a pioneering quantitative hedge fund co-founded by mathematician Edward Thorp. In August 1988, Regan and five other defendants were indicted on RICO charges for engaging in illegal tax-motivated stock parking transactions with Drexel Burnham Lambert trader Bruce Lee Newberg. Convicted on 63 counts in August 1989, Regan was sentenced to 6 months in federal prison. However, on June 29, 1991, ALL convictions were overturned on appeal when the court ruled the government had improperly applied RICO to what were essentially tax and regulatory disputes. The RICO indictment had already forced Princeton/Newport Partners to liquidate, destroying the fund despite the eventual reversal of all convictions.
Key Affiliations
Controversies & Concerns
Convicted on 63 counts of racketeering, securities fraud, and tax fraud in the first RICO prosecution arising from the Wall Street crackdown
All convictions overturned on appeal June 29, 1991; court ruled government misapplied RICO to tax disputes
RICO indictment forced Princeton/Newport Partners to liquidate, destroying the fund
Related Investigations (1)
Criminal Charges & Violations
2 documented violations
18 U.S.C. 1962 (RICO)Racketeering: Illegal tax-motivated stock parking with Drexel Burnham Lambert(Federal)
26 U.S.C. 7206Tax fraud in connection with illegal stock trades(Federal)
Known Associates & Connections
Bruce Lee Newberg
Drexel trader who was counterparty to Princeton/Newport's illegal trades; co-defendant
Charles Zarzecki
Co-defendant; general partner and chief trader at Princeton/Newport
Sources & Documentation
2 documented sources from official records, investigations, and reports
Personal Information
- Born
- c. 1942
- Birthplace
- United States
Education
Key Timeline
1988-08-04
Indicted alongside five other defendants on RICO charges for illegal tax-motivated stock parking with Drexel
1989-08
Convicted on 63 counts of racketeering, securities fraud, and tax fraud
1989-11-09
Sentenced to 6 months in federal prison
1991-06-29
ALL convictions overturned on appeal; court rules government misapplied RICO