Ex- Prudential Rep. Guilty Of Market-Timing

Sep 19 2008 | 10:02am ET

A former Prudential Securities representative has admitted that he helped his hedge fund clients deceptively market-time mutual fund shares.

Justin Ficken pleaded guilty to one count of conspiracy, three counts of wire fraud, and two counts of securities fraud this week. Ficken made the trades while working at Pru’s Boston office.

Federal prosecutors in Boston charged Picken and two other Pru brokers, the so-called “Druffner Group,” with disguising their identities and those of their hedge fund clients to facilitate the market-timing. The group allegedly defrauded mutual funds by placing thousands of market-timing trades worth more than $1 billion for five hedge fund customers from at least January 2001 through September 2003. According to the SEC, Druffner Group members established multiple broker identification numbers and opened numerous customer accounts for what were, in reality, only a handful of customers, to evade detection.

Ficken has been ordered him to pay $589,854 in disgorgement and pre-judgment interest but has appealed that judgment. He will be sentenced in the criminal case on Dec. 10.


In Depth

Royalties: The Alternative Assets of the Music Industry

Jul 8 2016 | 7:01pm ET

Recent market volatility has investors seeking greater insight into alternative...

Lifestyle

Vortic: Making Great American Watches Again

Jul 25 2016 | 6:29pm ET

If you are compelled by stories of entrepreneurial vision & drive, or simply...

Guest Contributor

MPI: Like Stellar Returns? Better Understand the Risks First

Jul 22 2016 | 8:44pm ET

When the press reports extraordinarily strong relative or risk-adjusted returns...