Updated from 1:15 p.m.
Securities regulators finally have caught up with Michael Sassano.
More than three years after the mutual fund trading scandal first made headlines, the
Securities and Exchange Commission
is filing civil administrative charges against Sassano and several of his colleagues. The agency alleges the former broker made millions of dollars executing abusive mutual fund trades for numerous hedge funds.
The complaint charges Sassano, a former CIBC and
broker, with collaborating with "numerous hedge fund customers to deceptively market time mutual funds" and improperly executing trades after hours.
The SEC is asking an administrative judge to hear the charges against the former broker, who is believed to be living in Russia with his girlfriend.
Ira Lee Sorkin, Sassano's attorney, says, he could not comment because "we have not seen the papers and Mr. Sassano has not been served.'' Sassano, 35, has residences in New York and Florida.
Sassano's exploits have been
over the years. He is credited with introducing a number of brokers to mutual fund-market timing, and referring business to some of his broker friends at other firms. He even was involved in starting a
hedge fund that engaged in abusive mutual fund trading.
Abusive mutual fund trading made Sassano
a rich man. For a time, he was a top earner at CIBC. The SEC alleges he made more than $12 million from 1998 to 2002. But sources have told
Sassano made much more.
Regulators allege that Sassano and his colleagues used a series of deceptive strategies to conceal their abusive trading practices from the mutual funds. The SEC charges that Sassano's operation was well-known to his employers and that some of his supervisors created an electronic trading platform to further his activities.
At the height of his tenure, Sassano led a team of 15 brokers, traders and assistants. Also charged with Sassano was his right-hand man Dogan Baruh, who executed many of the trades for him. Baruh's attorney, Andrew Lawler, could not be reached for comment.