U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19723 / June 9, 2006
United States of America v. Robert E. Shannon, (United States District Court for the District of Massachusetts Criminal No. 06-CR-10083-RWZ)
Securities and Exchange Commission v. Martin J. Druffner, et. al., (United States District Court for the District of Massachusetts Civil Action No. 03-12154-NMG)
Prudential Securities Former Branch Manager Pleads Guilty to Aiding and Abetting Securities Fraud
The Securities and Exchange Commission ("Commission"), announced today that on May 3, 2006, Robert E. Shannon, age 54, of Annapolis, Maryland, pled guilty to a one-count Information charging him with aiding and abetting others' violations of Section 10(b) of the Securities Exchange Act of 1934, in a case being prosecuted by the United States Attorney's Office in Boston, Massachusetts.
On November 4, 2003, the Commission sued Shannon and others, alleging that Shannon substantially assisted registered representatives in Prudential Securities' Boston, Massachusetts branch office in evading mutual funds' restrictions on the registered representatives' market timing of those mutual funds. Shannon's guilty plea stems from the same conduct that formed the basis of the Commission's civil enforcement action. In particular, the Information filed by the U.S. Attorney's Office charged that Shannon aided and abetted others' use of deceptive trading practices to trade in shares of a mutual fund on June 26, 2003.
Based on Shannon's guilty plea to the criminal Information, the Commission yesterday issued an Order Instituting Administrative Proceedings and Notice of Hearing ("Order") against Shannon to determine whether the allegations in the Order are true, provide Shannon with an opportunity to dispute the allegations, and determine what, if any, remedial action is appropriate and in the public interest.
For further information, please see: Litigation Release Numbers 18784 (July 14, 2004) (amended complaint filed against Shannon and others) and 18444 (November 4, 2003) (initial complaint filed against Shannon and others); and Administrative Proceeding File No. 3-12327 (June 8, 2006) (Order Instituting Administrative Proceedings against Shannon).