Pru Broker Hit With First Timing Criminal Case

The U.S. District Court has brought the first criminal charges against an individual in the ongoing mutual fund trading scandal, The Wall Street Journal reports this morning.

 

Skifter Ajro of Milford, Mass., is accused of acting, as part of a team of Prudential Securities brokers who left the firm in 2003, with deliberately aiding and abetting hedge funds in market timing a number of mutual funds between April 2001 and October 2003. Ajro, 37, was a junior broker at the time.

The Securities and Exchange Commission, in a civil case it filed jointly with the Massachusetts Securities Division two years ago, said the Pru team processed $1.3 billion worth of trades, with Ajro alone generating $700,000 worth of commissions for his company, $200,000 he took for himself.

Ajro's attorney, Daniel M. Rabinovitz, declined comment on details of the case but told The Journal: "When the truth about Prudential-approved market-timing practices becomes public, we are hopeful these charges will be resolved in a way that is favorable to Mr. Ajro."

If convicted of two counts apiece of wire and securities fraud, Ajro faces up to 20 years in jail and $5.5 million in fines.

Unlike other market-timing cases in which mutual funds were unwittingly used to generate profits, according to the news report, this case is different.

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.

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