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 |
|
Monday, June 7, 2004 Geeks Under Fire Even Geeks like to party. The SEC alleges that Geek Securities, a broker based in Boca Raton, engaged in market timing during 2001 to 2003. The agency filed a complaint against the broker in the Southern District of Florida on June 4. Fund companies detected a problem and blocked the broker from trading, the action alleges, sometime between September 2001 and November 2003. In November 2002, the broker transferred all relevant accounts to Geek Advisors, where the trading abuses continued. The abuses, the SEC alleges, were widespread: more than 1000 trades in more than 100 mutual funds took place. From April 2003 to October 2003, the companies were contacted 91 times by fund companies. Geek Securities and Advisors resorted to various techniques to continue to trade, including encouraging customers to establish multiple accounts, trade through clearing firms, and clone accounts. At least nine market timing arrangements were identified by the agency, three of which are hedge funds clients, the complaint stated. The companies also accepted and processed trades past the 4 p.m. cutoff, the complaint alleges. Prior to November 2002, the Geeks received transaction-based commissions for the trades; after November, the advisor received a one or two percent wrap fee based on total assets managed. The SEC named Geek Securities, Geek Advisors (the broker's affiliated investment adviser), Kautilya "Tony" Sharma, Geek Securities' president, and Neal R. Wadhwa, a registered representative affiliated with both entities, in the suit. The SEC is seeking disgorgement of profits and monetary penalties in the suit. Printed from: MFWire.com/story.asp?s=7356 Copyright 2004, InvestmentWires, Inc. All Rights Reserved |