Money Manager Bond Convicted of Fraud

June 10, 2002 ( - A prominent money manager has been convicted of fraud for channeling unprofitable securities to the accounts of client pension funds and others while "cherry picking" most of the profitable deals for himself.

According to a Reuters news report, a federal jury took less than an hour to reach a guilty verdict against Alan Bond, 40, president and chief investment officer of Albriond Capital Management.

Bond was convicted of three counts of investment advisory fraud, which carry a possible maximum prison term of 10 years each, and three counts of wire fraud, which carry a possible maximum term of five years each. He has been a frequent contributor to the popular financial television show, “Wall Street Week With Louis Rukeyser.”

Prosecutors charged that Bond’s “cherry-picking” scheme ran between March 2000 and July 2001 while Bond was out on bail awaiting trial on 1999 charges of taking more than $6 million in kickbacks from brokerage firms. Bond is scheduled to go to trial in November on the kickback charges.

The prosecutors alleged Bond made $6.3 million from the cherry-picking scheme while his clients lost more than $56 million.

Pension Plan Victims

The victims of the scheme were Birmingham Amalgamated Transit Authority Local 725, a union pension fund, Chapman Capital Management, an investment adviser, and the Old Dominion Disability & Retirement Allowance Plan, according to Reuters

The government argued that the pension funds lost two-thirds of their value, while Bond received a 5,000% return on his own investments in a little over a year.

US District Judge Leonard Sand set sentencing for September 9.

A graduate of Dartmouth College and Harvard Business School, Bond rose to prominence managing more than $600 million of pension and investment funds for about 25 clients, including the National Basketball Association, City University of New York and the Washington Metropolitan Transit Authority.