SEC Accuses Broker of Late Fund Trades
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A broker at Trautman Wasserman & Co. was accused by the Securities and Exchange Commission on Thursday of executing “tens of thousands” of late mutual fund trades on behalf of hedge fund clients.
From 2001 to 2003, Scott Christian carried out the late-trading scheme by time-stamping proposed orders just before 4 p.m. and then asking customers if they wanted to execute or change the orders based on post-4 p.m. market information, the SEC said in a statement.
The commission also said Christian took steps to conceal the late trades by opening and trading in multiple accounts using different registered representative identification numbers.
During the same period, Christian and Trautman Wasserman received 307 letters from 40 fund companies that sought to stop what appeared to be excessive trading in the brokerage firm’s accounts, the statement said.
Trautman Wasserman did not return a call for comment.
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