Enforcement: SEC charges former CFO with cheating the fund he worked for
It's a classic scam: putting oneself or one's associates between one's employer and the market and making a secret profit. That's what Ezra C Levy is accused of doing at investment company Boston Provident.
Describing Boston Provident (BosProv) as a "hedge fund," the SEC says that Levy bought shares on his own account, and then re-sold them to BosProv at an inflated price.
In order to do so, says the SEC, he made unauthorised trades using the firm's electronic trading entry system.
Although the CFO, Levy appeared to have a kind of clerical function: inputting trades as ordered by BosProv's CEO.
But he found that he could cross-match trades, the SEC alleges. It says that in June, he entered a sell order from his personal account at an inflated price, then cross-matched it with a buy order from BosProv.
The SEC says that he did this twice, creating an illicit profit of more than USD537,000.
"Levy executed a fraudulent scheme to benefit himself at the expense of Boston Provident and its clients," said Andrew Calamari, Associate Director of the SEC's New York Regional Office.
The SEC is applying for a freezing order relating to Levy's assets.
SEC actions are not criminal charges.
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