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The SEC Charges MA-Based Portfolio Manager with Diverting Millions to Personal Account

The Securities and Exchange Commission (SEC) has charged a Massachusetts-based portfolio manager, Kevin J. Amell, with fraud amid allegations that he diverted nearly $2 million from an account over which he had trading authority (the Fund) to his personal brokerage account.  In a parallel action, the U.S. Attorney’s Office for the District of Massachusetts has also filed criminal charges against Mr. Amell.

According to the SEC complaint, Kevin Amell abused his trading authority at least 265 times by pre-arranging the purchase or sale of call options between his personal brokerage account and the Fund’s brokerage accounts.  The complaint alleges that Mr. Amell matched trades wherein he profited by either buying call options at artificially lower prices and selling them shortly thereafter at higher prices to third parties; or by purchasing call options from third parties and selling them shortly thereafter to the Fund at artificially high prices.  In one example, the SEC’s complaint alleges that, in a series of trades involving Amazon securities, Mr. Amell allegedly generated a profit of $23,000 for himself in less than 23 minutes at the Fund’s expense.

The SEC’s complaint charges Kevin J. Amell with violating Sections 17(a)(1) and (3) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and numerous other rules violations.  The SEC is seeking a final judgment in which Mr. Amell is permanently restrained from engaging in the practices described above, disgorgement of ill-gotten gains plus interest, and civil monetary penalties.

Robert Wayne Pearce, a former SEC enforcement attorney, has litigated SEC actions for over 35 years, including, but not limited to, insider trading, stock market manipulation, and other alleged violations of the Federal securities laws.  Have you been sued by the SEC or believe that you may be subject of an investigation?  If so, call Mr. Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.  Mr. Pearce defends companies and individuals who may be the subject of an SEC investigation or enforcement action regarding their alleged involvement in securities laws violations.

This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida.  For over 35 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues.  The lawyers at our law firm are devoted to representing investors and financial industry professionals throughout the United States and internationally!  Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.