Securities Law Prof Blog

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

Thursday, July 10, 2008

ALJ Finds Broker Involved in Late Trading Scheme

An Administrative Law Judge has issued an Initial Decision in Pritchard Capital Partners, LLP, Administrative Proceeding No. 3-12753 and found that Respondent Joseph John VanCook (VanCook), while associated with the broker-dealer Pritchard Capital Partners, LLP (Pritchard Capital), engaged in a fraudulent mutual fund late trading scheme. VanCook enabled, and solicited, the mutual fund late trading business executed by his clients.  The Initial Decision concludes that VanCook willfully violated Rule 10b-5 and willfully aided and abetted and caused Banc of America Securities, LLC, to violate Section 22(c) of the Investment Company Act of 1940 and Rule 22c-1 thereunder. The Initial Decision orders VanCook to cease and desist from committing or causing future violations of the securities laws, bars him from associating with an investment adviser, broker, or dealer, and from working for an investment company, and orders him to disgorge $538,565.70 in ill-gotten gains (plus prejudgment interest) and to pay a civil penalty of $100,000.

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