ABN Amro didn’t admit or deny the SEC’s allegations, which arose from an alleged failure to reasonably supervise Angelo Iannone, its former head of international equities sales in New York.
A similar settlement was reached with Boston-based institutional investment management firm Oechsle International Advisors, for failing to reasonably supervise Andrew Parlin, a former principal and portfolio manager.
According to the SEC, Parlin purchased large numbers of shares in five European stocks held by the investment advisor’s clients through ABN Amro’s Iannone. The trades were made shortly before the close of the markets on the last trading days of the second and third quarters of 1998, according to the SEC. The late purchases were intended to boost the price of those stocks, pumping up the value of their clients’ portfolios.
In 1999 the London Stock Exchange fined ABN Amro Equities £250,000 and Morgan Stanley Securities £100,000 for “misconduct” after the scheme was uncovered there, according to the Financial Times.
The stocks involved were:
- British Biotech PLC
- Banca di Roma SpA
- Pohang Iron and Steel (ADRs)
In some cases, their efforts to push a stock’s price higher didn’t work.
ABN AMRO fired Iannone, while Parlin was forced out of Oechsle, according to the SEC. Both agreed to settle SEC fraud charges without admitting or denying the allegations and to pay a $75,000 fine. Both agreed as part of their settlement to a ban from their respective industries for a year.
Last year RT Capital Management, the investment arm of Royal Bank of Canada, settled a portfolio-pumping suit filed by the Ontario Securities Commission (see Settlement Deadline Nears for Pension Fund Manager RT Capital ).
– Nevin Adams firstname.lastname@example.org