Prudential Securities wasnt told once. It wasnt told twice. It wasnt told three times. Mutual fund companies sent the brokerage firm more than 25,000 letters asking it to stop market timing, Massachusetts regulators are expected to charge as early as today, The Wall Street Journal reports. The allegations could result in charges of civil securities fraud.
Wachovia, parent company of Prudential Securities, declined to comment for the article, and a Prudential spokeswoman would only say that the firm is cooperating with regulators.
At least two hedge funds will be named in the complaint, including Chronos Asset Management, which Canadian Imperial Bank of Commerce funded, and a second offshore firm referred to as Head Start, along with at three Prudential brokers, Martin J. Druffner, Justin F. Ficken and Ckifter Ajro. A CIBC spokesman also declined to comment.
The brokers are said to have made at least $3 million, and Druffner was one of the top-selling brokers in the country, according to the complaint, which The Journal has obtained. The complaint is also going to name Putnam Investments and Hartford Mutual Funds and cite "friendly fund wholesalers," who helped the Prudential brokers doctor accounts by informing them of threshold levels of that would sound off alarms.
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.