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Univ. of Toledo College of Law

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Friday, December 21, 2007

Former Prudential Broker Indicted on Market-Timing Charges

The United States Attorney's Office in Boston, Massachusetts obtained an indictment against Justin F. Ficken of Boston, Massachusetts, related to Ficken's alleged deceptive market timing activity while working at Prudential Securities, Inc. Ficken was charged with one count of conspiracy to commit wire fraud and securities fraud, four counts of wire fraud, four counts of securities fraud, and one count of obstruction related to testimony he gave during the SEC's related investigation.  The SEC previously filed a civil enforcement action against Ficken and others, alleging that Ficken was part of a three-person group of registered representatives, known as the "Druffner Group," that defrauded mutual fund companies and the funds' shareholders by placing thousands of market timing trades worth more than $1 billion for five hedge fund customers from at least January 2001 through September 2003. According to the amended complaint, Ficken knew that the mutual fund companies monitored and attempted to restrict excessive trading in their mutual funds. The amended complaint alleged that, to evade those restrictions when placing market timing trades, Druffner Group members disguised their own identities by establishing multiple broker identification numbers and disguised their customers' identities by opening numerous customer accounts for what were, in reality, only a handful of customers.

On September 13, 2007, the U.S. District Court for the District of Massachusetts entered a final judgment against Ficken. Ficken has appealed that judgment, and that appeal is pending.

http://lawprofessors.typepad.com/securities/2007/12/former-prudenti.html

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