Former Convergex CEO Pleads Guilty in $43.8M Securities Scheme

The former CEO of ConvergEx Global Markets Limited, Anthony Blumberg, 53, of Short Hills, New Jersey, pleaded guilty to conspiracy to commit securities and wire fraud in a Newark federal court.

According to court documents, Blumberg and his conspirators used a scheme to commit securities and wire fraud from 2006 through 2011. Clients placed orders to buy or sell securities with G-Trade Services LLC and ConvergEx Limited, which in turn routed orders to ConvergEx Global Markets Limited.

Traders at ConvergEx Global Markets Limited executed the orders and sometimes added a “spread,” a mark-down on the sale of a security or a mark-up on the purchase of a security, to the prices they had obtained for non-fiduciary clients.

To hide the fact that spread had been taken, Blumberg and traders acting under his direction sent false reports, known as “time and sales reports,” to clients. The false time and sales reports contained fabricated details regarding the individual transactions, including false information concerning the number of shares involved, the time at which the fill was executed, and the price at which shares were either purchased or sold.

Blumberg also admitted that he and his conspirators agreed to violate a client’s instructions to provide real-time transactional data by providing “batch fills” that hid the actual information the client sought.

Blumberg is the fourth individual to plead guilty as a result of the investigation into ConvergEx Group and ConvergEx Global Markets Limited’s practices. ConvergEx Group and ConvergEx Global Markets Limited paid $43.8 million in criminal penalties and restitution.

U.S. Attorney Craig Carpenito of the District of New Jersey, Assistant Attorney General Brian A. Benczkowski, Assistant Director in Charge Nancy McNamara, and Inspector in Charge Peter R. Rendina made the announcement.

Sentencing is scheduled for Dec. 5, 2018. Blumberg is represented by Seth L. Levine Esq. of New York.

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