U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23812 / April 25, 2017
Securities and Exchange Commission v. Kevin J. Amell, Civil Action No. 1:17-cv-10707 (D. Mass., filed April 24, 2017)
Portfolio Manager Charged with Diverting Nearly $2 Million to Personal Account
The Securities and Exchange Commission ("SEC"), on April 24, 2017, filed fraud charges against a Massachusetts-based portfolio manager accused of diverting at least $1.95 million to his personal brokerage account from a fund over which he had trading authority.
The SEC's complaint, filed in federal district court in Massachusetts, alleges that Kevin J. Amell carried out a fraudulent matched-trades scheme in which he prearranged the purchase or sale of call options between his own account and the brokerage accounts of the fund at prices that were disadvantageous to the fund and advantageous to him. In one series of trades involving Amazon securities, for example, Amell allegedly generated a $23,000 profit for himself in less than 23 minutes, at the fund's expense.
In a parallel action, the U.S. Attorney's Office for the District of Massachusetts filed criminal charges against Amell.
The SEC's complaint charges Amell with violating Sections 17(a)(1) and (3) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c), and Sections 17(a)(1), 17(a)(2) and 17(j) of the Investment Company Act of 1940 and Rules 17j-1(b)(1), (3) and (4). The SEC is seeking disgorgement of Amell's ill-gotten gains plus interest and penalties as well as injunctions.
The SEC's investigation, which is continuing, is being conducted by Melanie A. MacLean, John D. Marino, and Simona Suh of the SEC Enforcement Division's Market Abuse Unit and Elzbieta Wraga of the New York Regional Office. The case has been supervised by Joseph G. Sansone, Co-Chief of the Market Abuse Unit. The litigation will be led by Ms. MacLean, Ms. Suh, and Martin F. Healey of the Boston Regional Office. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of Massachusetts, the Federal Bureau of Investigation's Boston Field Office, and the Financial Industry Regulatory Authority.