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

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Future of Private Equity: New Opportunities, New Challenges

Feb 3 2017 | 6:41pm ET

The private equity industry’s astonishing rebound since the financial crisis has...

 

From the current issue of