TAG | broker receiving ill-gotten gains
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It was announced 0n March 21, 2011, on the SEC’s website that the SEC obtained an emergency court order freezing the assets of Urbana, Illinois money manager Timothy J. Roth for stealing more than $6 million of his clients’ mutual fund shares, liquidating the shares, and sending the ill-gotten gains to various accounts and companies under his control. The Court also entered a temporary restraining order prohibiting Roth from violating the anti-fraud provisions of the federal securities laws.
According to the SEC article, there was a civil complaint filed by the SEC. Roth worked for Comprehensive Capital Management, Inc. (“CCM”), a New Jersey-based registered investment adviser. The SEC’s complaint alleges that from October 2010 through February 2011, Roth stole more than $6 million worth of mutual fund shares from several employee deferred compensation plans for whom he provided investment advice.
The SEC complaint alleges that Roth, who worked out of CCM’s office near Urbana, Illinois, secretly caused the Plans’ mutual fund shares to be transferred to an account under his control, even though no such transfer had been requested or authorized by the Plans or the Plans’ participants. The SEC alleges that after selling the Plans’ shares, Roth funneled the cash proceeds to various accounts and companies under his control or for his benefit. According to the SEC’s complaint, at the time he was engaging in his scheme, Roth did not tell the Plans or their participants about the transfers. Instead, Roth sent them bogus account statements that deliberately omitted his surreptitious transfer of the mutual fund shares. Thus, the account statements overstated the Plans’ account holdings and concealed Roth’s theft.
In the SEC article they go on to say that the SEC’s complaint charges Roth with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and with aiding and abetting violations of Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-2 thereunder. In addition to the emergency relief already obtained, the complaint seeks preliminary and permanent injunctions, disgorgement, and civil penalties from Roth. The SEC’s complaint also names Roth’s companies as relief defendants and seeks disgorgement from them. The Court’s freeze order extends to the assets of the relief defendants. A hearing on the SEC’s motion for preliminary injunction has been set for 1:00 p.m. on March 30, 2011, at the U.S. District Court for the Central District of Illinois courthouse in Peoria, Illinois before Judge Michael M. Mihm.
This article was obtained on the SEC’s website.
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In an article on InvestmentNews.com, written by Lavonne Kukendal, March 23, 2011, she writes that James J. Konaxis, a former broker, has been charged with defrauding the widow of a victim of the Sept. 11, 2001, attack on the Pentagon of much of her victim compensation settlement money.
Ms. Kukendal writes that the (SEC) Securities and Exchange Commission said today that it charged the Beverly, Mass.-based rep with churning the victim’s accounts, which fell to about $1.6 million in value from $3.7 million between April 2008 and last May. During that time, Mr. Konaxis earned about $550,000 in commissions on the accounts of the victim, who was identified only as “S.T.”
The SEC said that it is conducting separate administrative proceedings against Mr. Konaxis in which he has consented to be barred from association with any broker-dealer, investment adviser, municipal-securities dealer or transfer agent. At the time of the fraud, Konaxis worked as a registered representative at broker-dealer Sentinel Securities Inc.
James J. Konaxis has consented to a partial judgment barring him from participating in any penny stock offering. The SEC also will seek disgorgement of the ill-gotten gains plus prejudgment interest and a monetary penalty.
According to the InvestmentNews article the phone calls to Sentinel Securities and to a phone number listed under James Konaxis in Beverly seeking comment weren’t immediately returned.
If you feel you have been an alleged victim of a fraudulent investment by James J. Konaxis, or Sentinel Securities, Inc., call a Securities Arbitration Lawyer for a free consultation on how to recover your losses. To speak with an attorney, call 888-760-6552, or visit www.stockmarketlawsuit.com. Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.
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