Jul. 22--A New York hedge fund has agreed to pay $150,000 to settle securities charges stemming from Mylan Inc.'s aborted $4 billion offer for a rival drug company in 2004.

The Securities and Exchange Commission yesterday charged Perry Corp. with failing to disclose it held nearly 10 percent of Mylan shares as part of a strategy to gain shareholder approval for the Cecil generic drug maker's proposed acquisition of King Pharmaceuticals.

Perry also held 7 million King shares that it stood to profit on if Mylan shareholders approved the acquisition.

SEC officials said yesterday that Perry held the right to vote its Mylan stock but used derivative securities to avoid the risk of taking losses on the 26.6 million Mylan shares it owned.

Perry's failure to disclose its Mylan holdings "deprived the market of important and relevant facts," the SEC said.

"By acquiring significant voting rights to Mylan shares without informing the marketplace, Perry illicitly increased its potential to profit from its merger arbitrage position," said David Rosenfeld, associate director of the SEC's New York office.

Perry agreed to pay the penalty without admitting or denying the SEC's allegations.

Mylan offered to purchase Bristol, Tenn.-based King in July 2004 and terminated its offer in February 2005.

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