Rulebook

The Blotter Report: New Year, Same Scams

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What are Friends For?

A life-long friendship that began in Long Island ended in allegations of a $9 million insider-trading scheme last week. On January 16, FINRA barred former J.P. Morgan Securities David Michael Gutman and his broker Christopher John Tyndall, a former advisor at Meyers Associates.

According to the regulator, Gutman learned about pending mergers through his work in J.P. Morgan's conflicts office. In conversations spanning March 2006 to October 2007, Gutman shared confidential information about at least six deals, with his friend Tyndall.

According to FINRA, Tyndall then used the information to trade ahead the corporate announcements, making $9 million in profits for clients, friends and family. Further, the complaint claims Tyndall made $870,000 in commissions from the deals.

Gutman and Tyndall neither admitted nor denied the charges, although both consented to FINRA’s findings and the ruling to bar them from the industry. Tyndall—who left Myers in 2010—was fired from Aegis Capital Corp. in February 2013 for concealing FINRA’s investigation from the firm. Additionally, J.P. Morgan Securities also fired Gutman, the Wall Street Journal reported.

 

End of the Line

A judge sentenced Bruce Harada to 20 years behind bars after authorities caught the Hawaii-based advisor swindling public employees out of $2.2 million.

As previously reported, the former ING North America Corp. advisor pled guilty in August to securities fraud and money laundering. According to prosecutors, between April 2007 and May 2012, Harada convinced 22 clients to transfer funds from their deferred compensation to a non-existent mutual fund. Harada then used the funds to purchase luxury cars, lavish vacations, and private school tuitions. 

Instead of the maximum sentence of 40 years, Circuit Court Judge Rom Trader recently handed down a 20-year sentence for securities fraud and a 10-year, concurrent sentence for money laundering, according to local news outlet Hawaii News Now.  

The judge also ordered Harada to pay restitution to ING, which already has reimbursed the former broker’s clients for their losses, according to prosecutors.

 

'Dead' But Not Gone

A Georgia investment advisor who faked his death in June 2012 as authorities closed in on his $21 million theft is behind bars and staying there. A Georgia judge ordered Aubrey Lee Price to remain in jail with no bond on Jan. 8, following his capture on New Year’s Eve after 18 months on the run.

Authorities claim Price, who became director of the Montgomery Bank & Trust in 2010, embezzled more than $20 million from the failing bank. Additionally, prosecutors claim Price fraudulently raised $40 million from about 115 investors through membership interests in his investment firm.

After his scheme was uncovered, Price sent a 22-page confession letter out in June and told family he was planning to kill himself. A Florida judge declared Price dead after FBI surveillance footage showed the fraudster boarding a ferry at Key West after purchasing diving weights.

Price was discovered alive after police pulled the 47-year-old over in Southern Georgia for driving a vehicle with illegally tinted windows.

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Compliance, regulatory and legal issues, with a fair amount of cops and robbers for fun.

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