Related Federal Cases
- ConvergEx CEO Blumberg Pleads Guilty to Securities Scheme · Washington
- Jury Convicts Leaford Cameron in Nationwide Law Fraud Scheme · Pennsylvania
- Liberation Way Founder Gets 3 Years for $9M Rehab Fraud · Washington
- $1B Investment Fraud Duo Busted · Washington
- Amber Towndrow Sentenced to Six Years for $1.4M Bank Fraud · Pennsylvania
Feds Indict ConvergEx Chief, Trader for Securities Fraud
A former CEO and a former trader of ConvergEx Global Markets Limited, a broker-dealer registered in Bermuda, have been indicted in federal court in the District of New Jersey for allegedly concealing additional fees, which they referred to as ‘trading profits,’ fraudulently charged to clients in connection with orders to buy and sell securities.
Anthony Blumberg, 49, of New Jersey, and Craig Marshall, 47, of Bermuda, were charged with securities fraud, wire fraud, and conspiracy to commit securities and wire fraud. In a separate action, the Securities and Exchange Commission (SEC) announced civil charges against Blumberg.
According to the indictment, certain ConvergEx Group broker-dealers regularly routed securities orders to CGM Limited in Bermuda so that it could take a mark-up or mark-down when executing the orders. Employees throughout ConvergEx Group and its subsidiaries referred to such mark-ups and mark-downs as ‘spread,’ ‘trading profits’ or ‘TP.’
To hide the fact that spread had been taken on trades, from 2007 to 2011, Blumberg, Marshall and others sent false transaction reports to clients with fabricated details regarding the transactions, or ‘fills,’ executed during the course of a day to complete a client’s orders. These reports falsified details including the number of shares involved in a fill, the time at which the fill was executed and the price at which shares were either purchased or sold.
Clients who received these reports had approximately $5.2 million in spread taken on their trades. The indictment alleges that Blumberg, Marshall and others agreed to violate a client’s instructions to provide real-time transactional data through an immediate data feed with details of trades that CGM Limited executed on behalf of its clients.
Assistant Attorney General Leslie R. Caldwell for the Justice Department’s Criminal Division called the scheme ‘a brazen effort to bilk millions of dollars from clients.’ Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office said that the indictment ‘underscores the FBI’s ability to work with our partners to investigate complex international financial crimes.’
The US Postal Inspection Service also announced its involvement in the case, with Inspector in Charge Philip R. Bartlett stating that the indictment demonstrates the service’s commitment to pursuing those in the financial services industry who have chosen to defraud its customers.
Key Facts
- State: New Jersey
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: DOJ Press Release ↗
🔒 Get the grimiest stories delivered weekly. Subscribe free →
Browse More
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News