Trader Charged with Making Too Nice for His Wife (with Lofchie Comment)

The SEC announced fraud charges and an asset freeze against a trader at a Dallas-based investment advisory firm who improperly profited by placing his own trades before executing large block trades for firm clients where such trades had the potential to change the relevant security's price. According to the Commission, Daniel Bergin, a senior equity trader at Cushing MLP Asset Management, secretly executed hundreds of trades through his wife's accounts.

Lofchie Comment: From a compliance standpoint, there are a number of interesting aspects of the charges. First, the charges emphasize the importance of investment advisers and broker-dealers obtaining trading account information for the household members of their employees. Second, in terms of red flags, the trader is reported to have continually accessed his wife's securities account during the day; also, the trader bought a very expensive car. Thirdly, one of the firms with whom the trader did business apparently shut down his account, as it suspected misconduct, but did not warn his employer.

See: Complaint; Press Release.