Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Friday, September 14, 2007

SEC Settles Late-Trading Charges

On  September  14,  the  SEC settled administrative proceedings as  to David Byck, William Cole, Charles Irwin, Michael Price, and Jay Sumner (Respondents).  In  2002-2003,  Respondents  operated  two  registered investment advisers, and entities that  purported  to  be  third-party administrators. The order finds that Respondents enabled  their  hedge fund clients to place mutual fund  orders  after  4:00  p.m.  ET,  but receive  the  net  asset  valuation  determined  as   of   4:00   p.m. Specifically, the order finds that, between August 2002  and  February 2003, Respondents conducted their late trading  via  their  registered investment advisers through a broker-dealer. The order  further  finds that  between  March  and  April  2003,  utilizing  sham   third-party administrators, Respondents submitted orders on behalf of their  hedge funds clients to National Securities Clearing Corporation to  purchase and sell mutual funds as late as 3:00 a.m.  ET,  while  obtaining  the prior day's 4:00 p.m. NAV. IN THE MATTER OF DAVID BYCK,  WILLIAM  COLE,  CHARLES  IRWIN,  MICHAEL PRICE, AND JAY SUMNER.

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