The Associated Press reports that Paul Saunders, the chairman and CEO of hedge fund James River Capital, has been fined $2.25m by US regulator the National Association of Securities Dealers, for 'allegedly using deceptive practices in trading in...long term investments known as variable annuities'. The regulator confirmed that this is the largest single fine it has ever imposed on an individual for alleged market timing-related abuses.
The New York Post reports that US prosecutors are claiming that former Fleet (now Banc of America) New York Stock Exchange floor specialist David Finnerty was a corrupt 'king' of the exchange. Finnerty was convicted Thursday of trading ahead of customer orders in his role as a market maker in GE stock, and reaping $4.5m in illegal profits for his firm. Finnerty, who received bigger bonuses because of his actions, now faces up to 20 years in clink.
Robert Trosten, the former CFO at collapsed commodity broker Refco, has been indicted by US authorities on charges related to the demise of the firm. According to The Wall Street Journal, 37-year-old Trosten, who was Refco's chief financial officer from May 2000 to August 2004, has been charged with one count of securities fraud and two counts of wire fraud. And over in Vienna, prosecutors have charged nine men, including Helmut Elsner, the former CEO of Bawag PSK, on a variety of charges connected with the Austrian bank's involvement with Refco.
Bloomberg reports that Charles Schmitt, a former New York Stock Exchange floor manager, was sentenced to four-and-a-half years in a Hong Kong jail, after pleading guilty to false accounting in a $194.5m hedge fund fraud. Liquidators managed to recover $167.m, but investors in Schmitt's fund, Charles Schmitt & Associates, still lost $46.6m.
Reuters reports that US regulator The Securities and Exchange Commission (SEC) has launched an investigation in 27 mutual funds that may have received kickbacks amounting to hundreds of millions of dollars over recent years. The regulator has declined to name the firms involved in the probe.
Finally, Bloomberg reports that the SEC itself is to be subjected to a 'broad review' by US government auditors, who will look at 'it's management and methods for policing the financial markets'.