Monday, 22 December 2014
Last updated 1 hour ago
Sep 8 2006 | 12:00am ET
As the days get shorter and regulators prepare for whatever scam or fraud may hit in the fall, prosecutors, lawyers and defendants have been putting a bow on several long-running legal dramas.
After three years, the improper mutual fund trading scandal seems to be on its last embers. The Securities and Exchange Commission this week said it would not appeal the dismissal of its case against Paul Flynn, marking the end on his two-year odyssey through the halls of justice.
Or, in this case, perhaps, injustice: Flynn was arrested in February 2004 and charged criminally by New York Attorney General Eliot Spitzer and civilly by the SEC for his alleged role in helping a pair of hedge funds late-trade mutual fund shares. But in November, Spitzer dropped the charges, saying he found two officials from electronic trading firm Security Trust Co. “significantly more morally culpable.” Then, last month, Administrative Law Judge Robert Mahony tossed the SEC’s case, saying Flynn had no idea he was abetting improper trading. Flynn’s attorney told the Journal News of White Plains, N.Y., that Flynn will seek to get back his job as managing director of equity investments at the Canadian Imperial Bank of Commerce.
Prudential Financial was not so lucky. The U.S. Justice Department thought it was morally culpable in the actions of a pair of its Boston brokers, who pleaded guilty to fraud charges last year for using fake identities to skirt mutual fund trading controls. Pru, bidding to avoid a criminal prosecution of its own, has agreed to pay $600 million to make the problem go away.
Two other huge hedge fund-related scandals are also drawing toward their endgames. Samuel Israel, one of the brains behind the Bayou Group scandal, has had his status as an associated person with the Commodity Futures Trading Commission revoked following his guilty plea last September. Israel actually requested the disqualification, probably figuring he won’t be needing it. He and his partner, Daniel Marino, are set for sentencing in White Plains in January. Both men face upwards of 30 years in prison.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.