NEW YORK (HedgeWorld.com)–New York State Attorney General Eliot Spitzer and Securities and Exchange Commission Director of Enforcement Stephen Cutler announced state criminal and federal civil charges against former Bank of America broker Theodore Sihpol III for helping New Jersey-based hedge fund Canary Capital Partners make allegedly illegal trades of mutual fund shares.
Mr. Sihpol faces a two-count criminal complaint charging him with larceny and securities fraud. Each count is a felony charge. If convicted, he would be subject to a mandatory term in state prison.
In addition, the SEC alleges that Mr. Sihpol violated the antifraud, mutual fund pricing and broker-dealer record-keeping provisions of federal securities laws. In its action, the Commission is seeking civil penalties, disgorgement and other measures, which may include permanently barring Mr. Sihpol from the securities industry.
“I am pleased that the staff of the Commission and Attorney General Spitzer were able to work closely and cooperatively in bringing today’s important actions,” Mr. Cutler said. The SEC has been concerned about state attorney generals pursuing such inquiries on their own.