The Securities and Exchange Commission this week filed charges against a securities broker for wrongfully using access to his clients’ securities brokerage accounts to enrich himself at the direct expense of his customers, a number of whom had invested retirement assets. In a continuing trend, the SEC discovered the purported fraudulent stock scheme using proprietary data analytics designed to identify patterns of suspicious securities trading.
The SEC brought fraud charges against broker Michael A. Bressman of New Jersey in federal district court, contending that he wrongfully used his access to an omnibus account to reap approximately $700,000 in illegal trading profits in a six-year span. In its complaint, the SEC contends that Bressman simply “cherry-picked” profitable trades in the omnibus account for himself and family members, and allocated the losing trades to other customers. Not exactly a pristine exercise of his fiduciary duties.
The U.S. Attorney’s Office for the District of Massachusetts evidently did not think so either. It filed criminal charges against Bressman arising out of the same or substantially similar alleged wrongful conduct.
This case further highlights the continued importance of data analytic technology as a tool in the SEC’s investigative arsenal. While data analysis certainly assists the SEC in identifying potentially suspicious securities transactions or patterns of illicit trading activity and thus may provide valuable leads, it does not and cannot alone prove a fraud. The SEC must still establish the basic elements of a fraud, including intent, using its more traditional methods of investigation, including the review of documents and the taking of sworn testimony.
If you are under SEC investigation, it is critical that you protect your legal rights by engaging an experienced SEC defense attorney. David R. Chase formerly worked in the SEC’s Enforcement Division as a Senior Counsel and understands how the SEC investigates, prosecutes and settles its cases.
The Law Firm of David R. Chase, an SEC law firm located in South Florida, is headed by SEC defense attorney, David Chase, who represents those under SEC investigations throughout the nation. Call SEC defense attorney Mr. Chase toll-free at: 800-760-0912 for a confidential and no cost initial consultation, or at email@example.com.