Prudential Securities' former Boston branch manager Robert Shannon has been told by Massachusetts regulators that he will be charged today for failing to supervise brokers allegedly involved in improper mutual fund trades, his lawyer, Steven Fuller, said.
"We've been informed that a complaint is going to be issued on Monday," said Fuller. "Mr. Shannon will defend the proceeding vigorously. As a supervisor, his job is to implement the policies and procedures of the firm as the firm dictates them and that is exactly what he did."
Massachusetts Secretary of the Commonwealth William Galvin plans to charge as many as six former Prudential brokers from the Boston office in connection with improper short-term trades, Business Week Online and the Boston Globe reported.
Shannon referred all questions to his attorney. Galvin didn't return a phone message left at his home Saturday morning. Matthew Nestor, Massachusetts' chief of securities enforcement, declined to comment when reached at home.
The charges come amid a broadening probe of trading practices at mutual fund companies, brokerages and hedge funds that threatens to undermine investor confidence in the US$7 trillion mutual fund industry.
Putnam Investments, the fifth-biggest US mutual fund company, this week became the first company to be charged as a result of the investigation. The Boston-based firm, Merrill Lynch & Co, Alliance Capital Management Holding LP and Bank of America Corp are among companies that have fired or suspended a total of more than 30 employees over fund trading.
Galvin has said some Prudential Securities brokers traded in and out of mutual funds for quick profits at the expense of long-term investors. He plans to charge that the ex-brokers created investment accounts at Prudential with different names and numbers to disguise market-timed mutual fund trades made on behalf of large investors such as hedge funds, Business Week said.
Prudential Securities became part of Wachovia Securities on July 1, when life insurer Prudential Financial Inc sold it to Wachovia Corp in a cashless transaction. Prudential Financial kept a 38 percent stake in the combined brokerage.
The Securities and Exchange Commission, NASD and New York Attorney General Eliot Spitzer have also requested information on mutual fund trading from Prudential Financial, the company said in a regulatory filing in September. Prudential Financial has said it was cooperating with all inquiries.
Shannon and five Prudential Securities brokers in Boston were fired in September after Galvin's allegations. The brokers were Martin Druffner, Justin Ficken, Marc Bilotti, John Peffer and Skifter Ajro, their attorney, Michael Collora, said on Oct. 1.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source