The Securities and Exchange Commission has charged two former executive vice presidents with Brean Murray with placing late trades for a number of clients, including Canary Capital.
Without admitting or denying the SEC’s findings, Ryan D. Goldberg and Michael H. Grady consented to the sanctions and cease-and-desist order imposed by the SEC.
The Commission said that between August 2001 and September 2003, Goldberg and Grady placed $1.8 billion in late trades and market timing for Canary and at least four other hedge funds with more than 20 mutual fund complexes, using Bear Stearns as the clearing broker. The scheme earned the two more than $2.1 million in fees.
The SEC also said that the two registered representatives also actively marketed their late trading services to hedge funds to try to win their business.
The SEC had fined both Goldberg and Grady $2.5 million in disgorgement and interest. However, based on the respondents’ sworn testimony about their financial conditions, the SEC has waived the entire amount for Goldberg and is charging Grady only $25,000.
The two are barred from working in the industry for three years.