U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18923 / October 7, 2004
SECURITIES AND EXCHANGE COMMISSION v. ALAN BRIAN BOND, ROBERT I. SPRUILL AND ALBRIOND CAPITAL MANAGEMENT, LLC, Civil Action No. 99-12092 (S.D.N.Y.)
COMMISSION SETTLES ACTION AGAINST ALAN BRIAN BOND
The Securities and Exchange Commission announced that on September 27, 2004, the United States District Court for the Southern District of New York entered a permanent injunction against Alan Brian Bond, 43, of Upper Montclair, New York. The Commission filed a complaint against Bond on December 16, 1999, alleging that he orchestrated a commission kickback scheme. The Commission's complaint alleged that Bond received over $6.9 million in commission kickbacks from three brokerage firms. Subsequently, the Commission amended its complaint, alleging that Bond later orchestrated an improper trade allocation or "cherry-picking scheme." The second amended complaint alleged that Bond realized nearly $6.6 million in profits from this cherry-picking scheme.
The Commission's complaint alleged that Bond, from at least September 1993 through November 1998, through his former investment advisory firm, Bond, Procope Capital Management, received over $6.9 million in commission kickbacks from three brokerage firms. The kickbacks, which were siphoned off of the investment returns of Bond's clients in the form of mark-ups or mark-downs on principal trades, were used by Bond to finance an opulent personal lifestyle that included the purchase of more than 75 luxury and antique automobiles and a large home and beachfront condominium in Florida. On August 10, 2001, the Commission filed an amended complaint seeking emergency relief, and added allegations that beginning in March 2000, Bond, through his advisory firm, Albriond, participated in an ongoing trade allocation or "cherry-picking scheme," in which Bond allocated the majority of profitable trades to himself, realizing actual profits of nearly $6.6 million, and the majority of unprofitable trades to three of his advisory clients, causing them to lose a total of over $56.8 million.
Bond and his investment adviser, Albriond Capital Management, LLC, without admitting or denying the Commission's allegations, consented to the entry of a judgment permanently enjoining them from future violations of the antifraud provisions of the federal securities laws, specifically Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Sections 206(1), 206(2) and 207 of the Investment Advisers Act of 1940, and additionally enjoining Bond from future violations of Section 17(a) of the Securities Act of 1933.
In two related criminal actions, Bond was convicted of investment advisory fraud, mail fraud, and conspiracy to commit investment advisory fraud, wire fraud, and commercial bribery, based on the same conduct alleged in the Commission=s complaint. Bond pled guilty to the kickback scheme and was found guilty by a jury in the cherry-picking scheme. Bond is currently serving a twelve and one-half year prison term and was ordered to pay $12.3 million in restitution to the victims of the schemes.