Trader Barred, Fined For Unauthorized Trading Cover-Up

Dec 19 2006 | 2:13pm ET

The Securities and Exchange Commission yesterday slapped a 12-month suspension on James Smith, former portfolio manager and vice president for Advanced Investment Management, for misdeed that cost the firm’s investors more than $415 million.

According to the regulatory agency, Smith leveraged client assets in violation of investment advisory agreements and concealed unauthorized trading in the client accounts. Specifically, the SEC alleges that the majority shareholder, president, and CIO of AIM orchestrated and conducted the improper trading scheme between January 2002 and July 2002 with the assistance of Smith, who then served as AIM’s vice president of equity trading.

The SEC had filed a complaint, in the U.S. District Court for the Western District of Pennsylvania on April 6, 2005, against Smith and other principals of AIM seeking to permanently enjoin Smith and others from violating the antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940.

Without admitting or denying the allegations of the complaint, Smith has consented to a 12-month suspension prohibiting him from associating or seeking to become associated with any investment adviser. He was also ordered to pay a civil penalty in the amount of $55,000.

The now defunct firm was a registered investment advisor and a commodity pool operator.

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...