The U.S. Attorney's Office in Boston has charged a second man in the rapid trading and subsequent cover-up scheme at Prudential Securities.

Martin J. Druffner, 36, of Hopkinton, Mass., was charged last week in an Information with four counts of wire fraud and four counts of securities fraud. Earlier this month, Skifter Ajro, 37, of Milford, Mass., was similarly charged. He pleaded guilty and will be sentenced in November.

The charges are noteworthy for two reasons. For starters, they are the first criminal charges from the mutual fund scandal to be brought for market timing. Two years ago, the Massachusetts Securities Division and the Securities and Exchange Commission brought civil charge against the brokers (see, MME, 08/08/05). The brokers denied those charges. In addition to Druffner and Ajro, that case also named Justin Ficken, John Peffer, Marc Bilotti, and their manager Robert E. Shannon. All of the men stepped down in wake of the allegations. The SEC's case is still pending and is expected to go to trial sometime next year.

But there's also the fact that the charges were brought in an Information, rather than an Indictment. That's likely a sign that the U.S. attorney is hoping to land bigger fish, experts told MME earlier this month. According to the Boston Globe, Druffner contends that Prudential knew about the market timing. Prudential will not comment on the case, but said it was fully cooperating with investigators, MME has reported.

If convicted on all counts, according to the Boston AG, Druffner faces upwards of 40 years in prison, followed by six years of supervised release, and fines of $21 million.

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