Dec. 23, 2003 — The SEC said it filed civil fraud charges against Las Vegas-based Security Brokerage Inc. and its president and majority owner, Daniel Calugar, for defrauding mutual-fund shareholders through improper late trading and market timing.
The SEC charged that from at least 2001 to 2003, Calugar, trading through Security Brokerage, reaped profits of approximately $175 million from improper late trading and market timing, principally through mutual funds managed by Alliance Capital Management and Massachusetts Financial Services.
The SEC applied for emergency relief after learning that on December 18 Calugar had transferred $50 million of proceeds from his scheme out of MFS. This transfer occurred on the same day that the Commission instituted an enforcement action against Alliance in connection with market timing activity. The Commission’s action against Alliance identified Calugar as the largest market timer at Alliance.