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Court Backs SEC’s Fraud Claim Against Ex-Broker

BOSTON (CN) - A Massachusetts man violated federal securities laws by opening 170 mutual fund accounts for only five customers, the 1st Circuit ruled.

The Securities and Exchange Commission sued Justin Ficken and five co-defendants. The SEC alleged that Ficken and his clients concealed their identities to mislead mutual fund companies into processing trades that they would not have otherwise processed, due to restrictions on excessive trading and market timing.

Ficken worked in the Boston branch of Prudential Securities Inc. when he and the other brokers began registering multiple financial advisor numbers under each of their names to trade mutual funds worth $1 billion.

Judge Dyk upheld the trial court's ruling for the SEC.

"Ficken invoked the Fifth Amendment or otherwise refused to answer questions about blocked account numbers," Dyk wrote, "His refusal to answer pertinent questions ... bars his reliance on that testimony in opposing summary judgment."

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