NASD has filed a complaint against A.B. Watley Direct, Inc. and its former representatives, Robert Conway and Kenneth Ng. NASD charged them with facilitating late trading and improper market timing of mutual funds on behalf of hedge fund clients.
In addition, ABW Direct President Robert Malin and Executive Vice President Linus Nwaigwe were charged with lapses in supervision. ABW Direct is a subsidiary of A.B. Watley Direct.
Conway and his assistant Ng allegedly used a computerized trading platform that enabled them to enter orders on behalf of ABW Direct and ABW Inc after the daily NAV for the fund had already been calculated.
"Market timing in violation of a mutual fund's limitations and late trading of fund shares are both unethical and harmful to fund shareholders," said James S. Shorris, NASD executive vice president and head of enforcement. "Firms cannot enrich few favored customers at the expense of a fund's long-term shareholders."