FOCUS - Fund manager indicted in kickback scheme (Is he a WSW elf?)
04:00 p.m Dec 16, 1999 Eastern
NEW YORK (Reuters) - A prominent New York pension fund manager has been indicted on charges of taking more than $6 million in kickbacks of commissions paid to brokerage firms where he steered clients, including the National Basketball Association.
Alan Bond, president and chief investment officer of Albriond Capital Management, formerly known as Bond Procope Capital Management, was indicted by a Manhattan federal grand jury Wednesday on 11 counts of conspiracy, fraud, bribery and making false statements.
Bond, 38, of Upper Montclair, N.J. was also sued in a related civil case filed by the Securities and Exchange Commission. The SEC alleged that the Harvard-educated Bond, who is a frequent guest on PBS' ``Wall Street Week with Louis Rukeyser,' used the kickbacks to buy more than 75 luxury and antique cars, a large home and beachfront condominium in Florida, and on shopping sprees at Saks Fifth Avenue and Tiffany & Co.
The alleged victims of the scheme include the NBA's pension
plan, the retirement funds of the Washington Metropolitan Area
Transit Authority, the Southeastern Pennsylvania Transportation
Authority, and the Ohio Police and Fireman's Disability Pension
Board.
John Siffert, Bond's lawyer, said his client plans to plead not
guilty to the charges. ``We expect him to be vindicated.'
The SEC said Bond had about 25 clients and more than $600
million under management. The clients were mostly union and
government pension funds, with the Washington transit fund
being the largest.
``Although Mr. Bond's clients were mostly pension funds, the
victims are human. Mr. Bond's scheme affected the life savings
and financial security of thousands of working people, such as
police officers, fire fighters, teachers and bus drivers,' said
Valeri Caproni, director of the SEC's Pacific region based in
Los Angeles. The Pacific office developed the civil case filed in
Manhattan federal court.
Robert Spruill, 52, of Newark, N.J., formerly a broker with the
Manhattan brokerage firms of Brenner Securities and Lintz
Glover White & Co., and the Connecticut brokerage firm Value
Investing Partners, also was named as a defendant in the SEC's
civil case and in a separate criminal case.
The charges allege that between the middle of 1996 and late
1998, Bond used his discretionary control of his clients'
accounts to direct millions of dollars of the clients' brokerage
business to Lintz Glover and Value Investing Partners. Spruill
then allegedly caused a substantial portion of those commission
revenues to be unlawfully transferred to Bond.
These kickbacks were allegedly made through payments to
Bond's credit cards and bank accounts and were used to
support Bond's lavish lifestyle, prosecutors said.
It also was alleged that between late 1993 and the middle of
1996, Bond misused hundreds of thousands of dollars of ``soft
dollar' credits belonging to Procope's clients. Soft dollar credits
are partial rebates of commissions paid to brokerages for
executing purchases and sales of securities. Under the law,
investment advisors may use soft dollar credits generated from
trades for their clients to buy research information and services
benefitting their clients.
Bond allegedly diverted these credits to his own use by
submitting his own credit card bills and other personal and
business expenses to the Brenner brokerage and instructing it to
pay these expenses with the soft dollar credits paid for by
Procope clients.
Copyright 1999 Reuters Limited. All rights reserved.
Republication and redistribution of Reuters content is expressly
prohibited without the prior written consent of Reuters. Reuters
shall not be liable for any errors or delays in the content, or for
any actions taken in reliance thereon. |
