Baird Exec Accused of Self-Dealing IPOs

One of the top money managers at Robert W. Baird, Mary Ellen Stanek, has been accused by a rival firm of trading initial public offerings in her own account, rather than in the mutual funds and separately managed accounts intended for clients, the Milwaukee Journal Sentinel reports. The firm, Red Granite, also implied that Stanek and four other executives at Baird did not hold proper securities licenses.

The accusations were made in a court document Red Granite filed in response to a lawsuit Baird filed against it. Red Granite said the document was mistakenly included in the public file. While Red Granite didn't make the accusations outright, it couched them in the form of inflammatory questions and 194 requests for information from Baird.

Baird is suing Red Granite and three of its executives, accusing them of taking client records and improperly touting their performance record while at Baird. Red Granite is a firm made up of 13 former Baird employees who left in April and May.

Both sides deny the other's accusations, Red Granite saying its executives left Baird because after questioning the licenses of the company's management team, the executives were "ostracized by management."

Baird denies Stanek placed any improper IPO trades and said that at the time the Red Granite executives issued a memo about the licensing issue, the executives were all properly licensed. Further, said Baird Chief Compliance Officer and General Counsel Matthew S. MacLean, Red Granite is waging a counteroffensive public-relations campaign "to divert the attention from their own misconduct."

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.