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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19857 / October 2, 2006

SEC v. Gene T. Mancinelli, Civil Action No. 06 CV 7885 (JGK) (S.D.N.Y.)

The Commission Charges Former Wall Street Access Broker with Late Trading and Deceptive Market Timing of Mutual Funds

The Securities and Exchange Commission announced that it filed an enforcement action in the United States District Court against Gene T. Mancinelli, a former broker at Wall Street Access, a registered broker-dealer. In its complaint, the Commission alleges that Mancinelli permitted his hedge fund customers to late trade and deceptively market time mutual funds. Specifically, from April 2001 through October 2001, Mancinelli accepted and executed more than 2,000 late trades in mutual funds for one hedge fund customer. Mancinelli permitted this customer routinely to place orders to purchase, redeem or exchange mutual fund shares well after 4:00 p.m. ET, the time as of which funds calculate their net asset value (NAV). Mancinelli was aware that the late trades would receive that day's NAV as opposed to the next trading day's NAV. Additionally, Mancinelli utilized deceptive tactics, such as using multiple accounts and multiple broker numbers, to hide the identity of his market timing customers from mutual funds, and otherwise to facilitate his customers' market timing strategies.

The Commission's complaint charges Mancinelli with violating Section 17(a) of the Securities Act of 1933, and violating and/or aiding and abetting violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The Commission's complaint also charges Mancinelli with aiding and abetting violations of Section 15(c) of the Exchange Act and Rule 10b-3.

Contact Person: Helene Glotzer (212) 336-0078, Kay Lackey (212) 336-0117

SEC Complaint in this matter

 

http://www.sec.gov/litigation/litreleases/2006/lr19857.htm


Modified: 10/02/2006