New York Attorney General Eliot Spitzer has announced that Grant Seeger and William Kenyon, the CEO and president of Arizona-based Security Trust Company (STC), appeared in New York County Supreme Court last week and pleaded guilty to charges in connection with allegations of illegal mutual fund trading practices.
Seeger pleaded guilty to violating the Martin Act and second-degree grand. Kenyon also entered a guilty plea on the charge that he violated the Martin Act. Seeger admitted to creating a system whereby the former hedge funds Canary Capital and Samaritan Asset Management were able to cover up their market-timing activities. They used STC's retirement plan customers to "piggy-back" trades.
Kenyon supervised the development of the software that allowed the trading to occur, according to his plea. He was also in charge of putting the software into operation with Canary and Samaritan.
Nine guilty pleas have been entered since Spitzer's office began its investigation two years ago. About $3.1 billion has been returned to investors.
Under the direction of the Deputy Chief of the Criminal Prosecutions Bureau, Laurie Israel, Assistant Attorneys General Ricardo Velez and Stephen Antignani of the Bureau prosecuted the case.