Securities Law Prof Blog

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

Monday, July 14, 2008

Broker Settles Market-Timing Charges

On July 11, the SEC issued a settled order (Order) against Dogan Baruh (Baruh) in a previously instituted administrative proceeding.  The Order finds that Baruh, a former registered representative (RR) at CIBC World Markets Corp. (CIBC) and Fahnestock & Co., Inc. (Fahnestock), engaged in a scheme to defraud mutual fund companies. Between June 1998 and September 2003, Baruh and certain other registered representatives (the brokers) actively assisted market timing customers in deceiving mutual funds. CIBC, Fahnestock and the brokers received hundreds of letters and emails from mutual funds regarding their market timing trading activities. Baruh and the brokers repeatedly ignored these communications, and continued to work with their market timing customers to implement their market timing strategies up until the point when mutual funds threatened to terminate their dealer agreements with CIBC or Fahnestock.  The Order directs Baruh to cease and desist from committing or causing any violations and any future violations of federal securities laws, bars Baruh from association with any broker, dealer or investment adviser, and prohibits him from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company or affiliated person of such investment adviser, depositor, or principal underwriter. Finally, the Order directs Baruh to pay disgorgement of $1 and a civil money penalty in the amount of $325,000. Baruh consented to the issuance of the Order without admitting or denying the Commission's findings, except as to the Commission's jurisdiction over him and the subject matter of the proceedings.  In the Matter of Michael Sassano, Dogan Baruh, Robert Okin, and R. Scott Abry

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