MANHATTAN (CN) – A New York broker misappropriated millions of dollars by shifting the trading risk from a large institutional investor to Creswell Equities, giving Creswell a $3.3 million windfall, the Securities and Exchange Commission claims in Federal Court.
The SEC says Jose O. Vianna Jr., a former broker with Maxim Group, simultaneously entered buy or sell orders in the accounts of Creswell and the institutional investor, referred to only as “Customer A.”
Vianna allegedly placed a buy order in one account and a sell order in the other. If Customer A’s trade made money, Vianna diverted it to Creswell’s account, but if Creswell’s trade came out on top, he left the trades alone, the SEC claims.
“The effect of this scheme was to transfer all trading risk from Creswell to Customer A, since Creswell profited whether the stock price went up or down,” the lawsuit states.
The SEC accuses Vianna of securities fraud, and aiding and abetting securities fraud, and claims Creswell profited unjustly from the scheme.
The agency demands an order barring Vianna from future violations and forcing Vianna and Creswell to disgorge their allegedly ill-gotten gains.
The SEC is represented by George Canellos.