According to a statement released by the agency on Tuesday, the US Securities and Exchange Commission (SEC) has instituted enforcement proceedings against former managing director of the Canadian Imperial Bank of Commerce (CIBC), Paul A. Flynn, over his role in providing financing to hedge funds which he knew were engaging in unlawful practices such as late trading and market timing.
Commenting on the proceedings, director of the SEC's Division of Enforcement, Stephen M. Cutler explained that:
"We are committed to punishing not just those who engaged in the trading, but also those who facilitated it. Bankers, by providing financing to their hedge fund clients, now join the list of brokers, traders, and mutual fund advisers who have been charged with participating in unlawful mutual fund trading."
According to the Enforcement Division, between 2001 and 2003, Flynn arranged for certain hedge fund clients, including Canary Capital Partners, LLC, to receive financing from a CIBC subsidiary. Flynn negotiated structured swaps and loan agreements that provided these hedge fund clients with leverage to trade in mutual fund shares.
The Division alleges that this conduct was fraudulent because, as evidenced by a memo sent following a routine due diligence visit, Flynn was aware that these hedge fund clients were engaged in unlawful mutual fund trading through an electronic trading platform operated by Security Trust Company, N.A. (STC).
The SEC is seeking civil penalties, disgorgement and other relief, and may permanently bar the former CIBC official from the securities industry.
.
Network Tweets
Network BlogsContent
provided by
|
Archive | Resources | Partners | Site Map | Links | Newsletter Archive | Contact | RSS Feeds | About | Syndication | Advertising & Marketing | Recruitment | Terms & Conditions | Privacy & Cookies
Copyright © 2012 - All Rights Reserved - Tax-News.com
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment