NEW YORK (HedgeWorld.com)?Steven B. Markovitz a former executive and senior trader with Millennium Partners LP today pleaded guilty to a violation of New York?s Martin Act in New York State Supreme Court.
The Securities and Exchange Commission and New York Attorney General?s office in a joint announcement said that Mr. Markovitz has agreed to a lifetime bar from association with an investment adviser or mutual fund as part of a settlement agreement.
?This guilty plea is a clear step forward in the investigation and prosecution of wrongdoing in the mutual fund industry. Working with SEC, my office will continue to pursue this matter aggressively,? said Eliot Spitzer, New York Attorney General, in a statement.
The SEC?s administrative order found that the hedge fund manager committed securities fraud as part of a late-trading mutual fund shares agreement on behalf of Millenium. According to the SEC order, Mr. Markovitz was engaged in short-term trading of mutual fund shares from 1999 to 2003.
The SEC alleges that broker-dealers permitted Mr. Markovitz to communicate orders to purchase and to sell mutual fund shares after 4:00 p.m. Eastern time but obtained the price based on that day?s net asset value. In some cases, he would communicate the orders to broker-dealers before 4:00 p.m. and then confirm, alter or cancel the proposed orders after 4:00 p.m. Then other times he would communicate the orders in the first instance after 4:00 p.m.
Stephen M. Cutler, director of the SEC?s division of enforcement, said in a statement: ?I am pleased that once again close cooperation between the commission and Attorney General Spitzer has resulted in expeditious and aggressive action on behalf of investors.?