MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
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Thursday, March 14, 2013 10 Years Later, a Broker Pays $763K Over Market-Timing The final defendant in a August 2006 mutual fund market timing fraud action filed by the SEC has paid the regulator $763,000 to settle the allegations. According to an SEC document the regulator alleged that former Prudential Securites broker Frederick J. O'Meally "used deceptive practices to evade blocks by mutual fund companies on his market timing trading." On December 14, 2011, the document states, a federal jury returned a verdict in the Commission’s favor on securities fraud charges against O’Meally, a resident of Bay Shore, New York. O’Meally is a former registered representative of broker-dealer Prudential Securities Inc. The jury found O’Meally liable for violations of Sections 17(a)(2) and/or (3) of the Securities Act of 1933. The verdict against O’Meally followed a month-long trial in Manhattan before Laura Taylor Swain, United States District Court Judge for the Southern District of New York. According to the SEC document, the Commission filed its Complaint on August 28, 2006 against four registered representatives formerly employed by Prudential Securities, Inc. The Complaint alleged that, between 2001 and 2003, certain mutual fund companies detected market timing activity by the defendants and attempted to block the defendants and their hedge fund customers from further trading in their funds. The Complaint further alleged that the defendants used fraudulent and deceptive trading practices to conceal their and their customers’ identities to evade these blocks. The SEC document states that cases against the three other defendants had been resolved previously by settlement. In its final judgment against O’Meally, the court ordered him to pay $444,836 in disgorgement of his profits from illegal market timing transactions plus $258,401.55 in prejudgment interest and a civil penalty of $60,000, for a total of $763,237.55. The Commission also brought related enforcement actions against several other parties associated with Prudential Securities concerning deceptive market timing activities, as well as a settled enforcement action against Prudential Securities itself on August 28, 2006, in which Prudential agreed to pay $270 million that was later distributed to harmed investors. For more information on the settlement, the charges and the related cases, go to the SEC document. Printed from: MFWire.com/story.asp?s=43291 Copyright 2013, InvestmentWires, Inc. All Rights Reserved |