SEC Gets $819,000 'Soft Dollar' Settlement
WASHINGTON (CN) - Instinet, a New York brokerage, will pay $819,000 to settle charges that it aided and abetted failure to disclose rebates of $430,000 on commissions, the SEC said in a settled complaint.
The SEC summarized what happened in one paragraph in its 8-page cease-and-desist order: "From January 2009 through July 2010, Instinet paid approximately
$430,000 in client commission credits called 'soft dollars' as requested by its customer, J.S Oliver Capital Management, L.P. ('JS Oliver'), a San Diego-based investment adviser, for expenses that JS Oliver had not properly disclosed to its clients. The improper payments included $329,365 to the ex-wife of JS Oliver's president, Ian O. Mausner; thirteen months of increased rent payments totaling $65,000 for JS Oliver's offices at Mausner's home; and two payments totaling $40,094.54 for upkeep on Mausner's New York City timeshare. Instinet made the payments pursuant to JS Oliver's requests even though the information JS Oliver had provided to Instinet when requesting approval of the payments presented significant red flags and clear suggestions of irregular conduct that each payment was improper."
The SEC administratively charged Mausner and J.S. Oliver Capital Management in August with securities violations.