SEC bars portfolio manager over options fraud

Maria Nikolova

The decision of the Securities and Exchange Commission follows a judgement in a criminal case against Kevin J. Amell, who was sentenced to a prison term of 18 months and had to pay restitution of $1.5 million and forfeit of $1.95 million.

The United States Securities and Exchange Commission (SEC) on Monday announced that it had decided to accept a settlement offer by Kevin J. Amell, a former employee of a a Boston-based asset management firm, an investment adviser registered with the Commission.

Mr Amell, a resident of Hingham, Massachusetts, worked at the firm in question from approximately 2009 through April 2017. He was first employed as an options trader and then as a Vice President and Portfolio Manager.

On May 23, 2017, Mr Amell pled guilty to one count of securities fraud before the United States District Court for the District of Massachusetts in a criminal case brought against him.

The count of the criminal information to which Mr Amell pled guilty alleged, inter alia, that he engaged in a scheme to defraud the firm by causing it to sell options to him at prices below those at which other market participants were willing to sell them, and then selling those options to others at higher prices; and also by buying options from others at lower prices and then causing the firm to buy those options from him at higher prices.

In August this year, a judgment was entered in the criminal case against Mr Amell, captioned United States v. Amell, 1:17-cr-10101-IT. He was sentenced to a prison term of 18 months, followed by one year of supervised release; restitution of $1,535,353; and forfeiture of $1,954,457.

In the documents, published by SEC on Monday, the Commission orders, in line with Section 203(f) of the Advisers Act, that Mr Amell be, and hereby is barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.

Mr Amell had admitted the Commission’s jurisdiction over him and the subject matter of these proceedings nd consents to the entry of the Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions.

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