Michael J. Rice, former executive director and president of the private client group at Prudential Securities, settled with the Securities and Exchange Commission over charges he failed to supervise registered reps who permitted their hedge fund clients to market time mutual funds between 2000 and 2003. Without admitting to or denying wrongdoing, Rice is paying a $100,000 fine and will be suspended from supervising broker/dealers for a year.
The SEC said the reps used multiple client accounts and broker identification numbers to conceal the activity.
“On several occasions,” the SEC said, “Rice participated in or directed the issuance of policies and procedures that ostensibly set limits on market timing by Prudential registered representatives, but none of the policies adequately addressed their use of multiple accounts and [account] numbers to evade detection.” Rice also failed to recommend discipline sanctions against any of the offenders, the SEC said.