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Rating:Judge Rules Against Ex-Pru Brokers Not Rated 2.0 Email Routing List Email & Route  Print Print
Friday, January 07, 2005

Judge Rules Against Ex-Pru Brokers

by: Sean Hanna, Editor in Chief

Five ex-Prudential Securities brokers will face civil fraud charges stemming from mutual fund market timing, said a U.S. Court judge Thursday. The brokers had sought to have the case dismissed.

The brokers allegedly used multiple accounts and identities to place trades for hedge fund clients worth $1.3 billion with 52 mutual fund complexes. The brokers also collected commissions of more than $5 million on the trades, SEC officials allege.

The brokers include Martin J. Druffner, John S. Peffer, Justin F. Ficken and former branch manager Robert Shannon.

Judge Nathaniel M. Gorton of US District Court in Boston ruled against the brokers and allowed the case to proceed. The judge ruled that the SEC provided enough information and examples of the brokers' use of multiple identities.

The judge also ruled that charges that Shannon aided and abetted the other brokers should also stand.

"The information set forth in the complaint, including the long lists of multiple account numbers for identified clients offers reasonable and strong support for the inference that each broker intentionally misled certain funds with respect to the identities of the investors," the judge wrote in the opinion. 

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