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. Continue reading →