\t\t\t\tThe SEC has filed a case accusing broker Brian Hirsch of illegally receiving over $1M in secret kickbacks in return for giving some customers favored access to “lucrative” initial public offerings. The regulators said that these customers made money because of the special treatment. Meantime, prosecutors in New Jersey have filed a parallel criminal case against Hirsch.<\/p>\n
According to the SEC, Hirsch, who worked at two broker-dealers, disregarded policies and procedures and made \u201clong-running\u201d deals with specific customers, granted them bigger allocations of some of the public offerings that the firms were marketing. Advisor Hub<\/em> reports that these two brokerage firms were Barclays Capital (BARC) and Stifel (SF).<\/p>\n As part of the deal, contends the regulator, a customer named Joseph Spera and another customer paid Hirsch cash kickbacks that were equivalent to a percentage of the trading profits they made for the offering stock allocated to them. Hirsch is accused of giving the two customers \u201cpreferential access to hundreds of IPOS and secondary public offerings.\u201d These customers purportedly would usually sell their stock quickly so that they could make a \u201csubstantial profit.\u201d This was at the expense of the firms\u2019 other customers and the interests of issuers in raising funds from long-term investors. <\/p>\n