A trio of former executives from Security Trust Co. and Canadian Imperial Bank of Commerce pleaded innocent Monday in Manhattan criminal court to charges stemming from the mutual fund scandal, Reuters reports.
Former Security Trust President William Kenyon and CEO Grant Seeger pleaded not guilty to 98 counts of, among other charges, larceny and securities fraud. Seegers lawyer Frederick Hafetz said, "We will go to trial and are confident he will be vindicated at trial." Security Trust was broken up in December for its role in the scandal.
Another former Security Trust employee, senior vice president of corporate services Nicole McDermott, pleaded guilty in December to similar charges, which fall under New Yorks Martin Act, and faces a maximum of four years in prison.
For Paul Flynn, CIBCs former managing director, a plea of innocent to 27 criminal counts stemming from his alleged $1 billion in financing for illegal mutual funds comes after a Feb. 3 arrest at his Larchmont, N.Y., home. At his arraignment back in early February, a judge considered Flynn a flight risk and stripped him of his passport.
The charges against Flynn are tied in with the wrongdoing that forced the closing of Security Trust. Two hedge funds that Flynn allegedly helped in the improper trades, Canary Capital and Samaritan Asset Management, placed their trades through the computerized trading platform of Security Trust, which acted as a clearing house when it was a business.