Greedy, Greedy, Greedy, SEC Tells Trader

DALLAS (CN) – Dallas equities trader Daniel Bergin made $1.7 million by “front-running” trades through his wife’s account, the SEC claims in court.
     Front-running means placing orders for oneself ahead of large customer trades that can be expected to increase a stock’s price. News of a buy order for a large number of shares, for instance, rippled through the market instantly, as do large sell orders.
     “Bergin, a senior equity trader at Cushing MLP Asset Management, secretly executed hundreds of trades through his wife’s accounts in a practice known as front running,” the SEC said in a statement announcing its complaint.
     “Bergin illicitly profited by at least $520,000 by routinely purchasing securities in his wife’s accounts earlier the same day he placed much larger orders for the same securities on behalf of firm clients. Bergin concealed his lucrative trading by failing to disclose his wife’s accounts to the firm and avoiding pre-clearance of his trades in those accounts. Bergin also attempted to hide his wife’s accounts from SEC examiners.”
     In the complaint itself, the SEC says Bergin made at least $1.7 million from front-running: “In breach of his duties to Cushing and of his fiduciary duties to its clients, on at least 400 occasions that are currently known to plaintiff, Bergin used this information to trade in his wife’s undisclosed brokerage accounts in the same securities and on the same day he placed Cushing’s client trades (‘same day trading’), and in over 130 of those cases, front-running the firm’s client trades. During the relevant period, he reaped illegal trading profits of at least $1.7 million.”
     The SEC sued Bergin, 40, of Dallas, and sued his wife, Jacqueline Zaun, as a relief defendant.
     “In 2011, Bergin made approximately $360,000 in salary and bonus,” the complaint states.
     Apparently, he didn’t think that was enough.
     The SEC seeks disgorgement, penalties and an injunction.

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