Securities and Exchange Commission Charges Ex-Portfolio Manager With Failing To Disclose Personal Stock Transactions

Geoffrey Brod, a former Aeltus Investment Management LLC portfolio manager has been charged by the SEC with concealing personal stock trades held by mutual funds that he was overseeing. The SEC is also charging him with falsifying internal reports. According to the SEC, Brod’s wrongful activities are in violation of his company’s ethics, as well as the antifraud and reporting provisions of the 1940 Investment Company Act.

SEC rules mandate that Brod turn in quarterly and yearly reports of personal securities transactions to Aeltus, which mandates pre-clearance of all portfolio managers’ securities trades, prohibits short-term trades, allows no more than 30 securities trades in a quarter, and requires both a 60-day holding period and a yearly certification of code compliance.

Brod is said to have actively taken part in personal, short-term trading in public company stocks. He had access on a regular basis to mutual fund holdings and their transactions in securities that were traded publicly. His method of trading, says the commission, required a very short-term trading pattern, and his holding period lasted about two to seven days. He engaged in about 3,5000 personal trades.

Brod is accused of making about $410,000 from his transactions. In addition, the SEC says Brod submitted bogus quarterly and yearly reports to Aeltus. In the reports, he stated that he had no securities holdings or transactions to report. According to the SEC, he also falsely certified his yearly compliance with Aeltus’ Code of Ethics.

A hearing will take place to determine the veracity of the SEC’s allegations against Brod. Aeltus, now called ING Investment Management Co., fired Brod in 2003.

For many years, Shepherd Smith and Edwards has helped investors who have lost money. because of the misconduct of brokers and other members of the securities industry, recover their losses. We have successfully represented many clients throughout the U.S. and internationally, and our offices are conveniently located in Phoenix, Chicago, New York, San Francisco, Dallas, New Orleans, Houston, and Mexico City. Contact Shepherd Smith and Edwards for your free consultation.

Related Web Resources:

SEC Alleges Ex-Fund Manager Broke Law, Forbes.com/AP, April 10, 2007
Read the SEC Order Against Brod (PDF)

U.S. Securities and Exchange Commission

ING Investment Management