U.S. Securities and Exchange Commission
Litigation Release No. 18767 / June 29, 2004
SEC Defendants Indicted for Market Timing and Late Trading of Mutual Fund Shares
Securities and Exchange Commission v. Geek Securities, Inc., Geek Advisors, Inc., Kautilya "Tony" Sharma, and Neal R. Wadhwa, Civil Action No. 04-80525 Paine/Johnson (S.D. FL), filed June 4, 2004.
United States v. Kautilya Sharma a/k/a "Tony Sharma", Neal Wadhwa, Geek Securities, Inc., Geek Advisors, Inc, et. al6, Criminal Action No. 03-801460CR-Marra/Seltzer (S.D. FL), filed June 24, 2004.
The Securities and Exchange Commission (SEC) announced today that on June 24, 2004, Geek Securities, Inc., Geek Advisors, Inc., Kautilya "Tony" Sharma, and Neal R. Wadhwa were indicted on criminal charges brought by the United States Attorney for the Southern District of Florida. Geek Securities, Geek Advisors, Sharma and Wadhwa were named in a thirty-six count second superseding indictment charging, among other things, a mutual fund "market timing" and "late trading" scheme. If convicted, the defendants face penalties that range from 5 to 20 years imprisonment as to each count of the indictment. The defendants also face fines if convicted on any of the charged counts.
The second superseding indictment alleges that Sharma, Wadhwa, Geek Securities, and Geek Advisors conspired in a mutual fund trading scheme to make money by engaging in mutual fund "market timing" and "late trading" from 2001 until late 2003. The defendants are alleged to have conspired to make money trading shares of various mutual funds by deceiving those funds, their shareholders, and the investing public at large by, among other things, circumventing mutual fund rules in order to engage in prohibited mutual fund "market timing" and "late trading." Sharma and Wadhwa also are alleged to have conspired to cover-up late trading activity by creating false documentation as to the time those trade orders were received.
On June 4, 2004, the SEC filed a civil enforcement action against Geek Securities, Geek Advisors, Sharma, and Wadhwa alleging antifraud violations of the securities laws as a result of their market timing and late trading activities. The SEC's action against the defendants remains pending. The SEC acknowledges the efforts of the United States Attorney's Office for the Southern District of Florida and the Federal Bureau of Investigation in this action.
For more information see Litigation Release No. 18738 (June 4, 2004).