Portfolio Manager Charged with Diverting Nearly $2 Million to Personal Account

Posted by on April 25, 2017 12:12 pm
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Linus Unah – Fourth Estate Contributor

Washington, DCq, United States (4E) – The U.S. Securities and Exchange Commission (SEC) Monday announced fraud charges against a Massachusetts-based portfolio manager accused of diverting at least $1.95 million to his personal brokerage account from a fund over which he had trading authority.

The SEC’s complaint alleged that Kevin J. Amell carried out a matched-trades scheme in which he prearranged the purchase or sale of call options between his own account and the brokerage accounts of the fund.

The SEC further alleged that he did this at prices that were “disadvantageous” to the fund and “advantageous” to him.

In one series of trades involving Amazon securities, for example, Amell allegedly generated a $23,000 profit for himself in less than 23 minutes at the fund’s expense, according to the SEC.

“As alleged in our complaint, Amell abused his trading authority at least 265 times by matching trades between the fund and his personal account at prices that he intentionally and fraudulently skewed to benefit himself,” said Joseph G. Sansone, Co-chief of the SEC enforcement division’s market abuse unit.

The SEC’s complaint charges Amell with violating federal securities law and is seeking disgorgement of Amell’s ill-gotten gains plus interest and penalties.

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