Former Transition Management Executive Agrees to Securities Industry Bar and is Ordered to Pay Over $975,000 to Settle Fraud Charges
Litigation Release No. 24023 / January 3, 2018
Securities and Exchange Commission v. Khaled "Kal" Bassily, No. 16-cv-2733 (S.D.N.Y. filed Apr. 12, 2016)
The former head of ConvergEx Group's transition management business has agreed to be barred from the securities industry and has consented to a judgment ordering him to pay more than $975,000 to settle fraud charges the Securities and Exchange Commission filed in 2016.
The SEC's complaint alleged that Khaled "Kal" Bassily participated in a fraudulent scheme to hide from charities, religious organizations, and retirement funds that they paid substantially higher amounts than disclosed for the execution of trading orders.
Without admitting or denying the SEC's allegations, Bassily consented to the entry of a final judgment that ordered him to pay a total of $988,414 in disgorgement, prejudgment interest and a civil penalty and permanently enjoined him from violating Sections 10(b) and 15(c)(1) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933. Bassily also consented to the entry of an SEC order that barred him from the securities industry. Final judgment was entered on December 21, 2017, and the industry bar was imposed today.
The settlement follows charges announced in December 2013 against three ConvergEx Group subsidiaries that agreed to pay more than $107 million and admit wrongdoing to settle the matter. Two former employees and a former executive of another ConvergEx Group subsidiary also settled charges with the SEC related to this scheme. In August 2014, the SEC filed charges against Anthony G. Blumberg, a former executive of a ConvergEx Group subsidiary. The SEC's charges against Blumberg are currently pending in federal court in Newark, New Jersey.
The SEC's investigation was conducted by Sarah L. Allgeier, Cheryl L. Crumpton, Richard E. Johnston and Thomas D. Manganello, and supervised by Jennifer S. Leete. Litigation was led by Thomas A. Bednar and Gregory N. Miller. The SEC appreciates the assistance of the Fraud Section of the U.S. Department of Justice's Criminal Division, the Federal Bureau of Investigation and the U.S. Postal Inspection Service.