SEC Short-Sale Probe Turns to Gryphon Fund

It's been a rough year on the regulatory front for the Dallas hedge fund Gryphon Partners.

In April, Jonathan Daws, a former Gryphon portfolio manager, pleaded guilty in federal court to a conspiracy charge arising from a scheme involving confidential information about government investigations of publicly traded companies.

Daws, who left Gryphon in 2002, participated in a plot hatched by notorious short-seller Anthony Elgindy that involved betting against companies being probed, then driving down the stock prices by leaking the news on the Internet. Elgindy and former FBI agent Jeffrey Royer, the scheme's masterminds, were convicted in January after a lengthy trial in New York. ...