Keith Wakefield, Securities Fraud, Illinois 2024

A Chicago trader has been convicted of fraud for engaging in unauthorized speculative bond trading that cost his employer and others more than $30 million.

A jury in U.S. District Court in Chicago on Wednesday convicted KEITH WAKEFIELD, 50, of Chicago, on one count of securities fraud and three counts of wire fraud. Each count is punishable by a maximum sentence of 20 years in federal prison. U.S. District Judge Steven C. Seeger did not immediately set a sentencing date.

The conviction was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Robert W. ‘Wes’ Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. The U.S. Securities and Exchange Commission, which filed a civil enforcement action against Wakefield, provided valuable assistance. Assistant U.S. Attorneys Sean Franzblau and Bradley A. Tucker are prosecuting the criminal case.

According to evidence presented at trial, Wakefield worked as the head of fixed income trading for IFS Securities, Inc., a broker-dealer in Chicago. In 2019, Wakefield knowingly and fraudulently engaged in unauthorized speculative trading in U.S. Treasury bonds using his employer’s trading accounts, causing more than $30 million in losses to the employer and its counterparties.

Wakefield attempted to conceal the unauthorized trades and losses by entering fake off-setting trades into a clearing broker’s order system, creating the false impression that he had profitably traded through a different clearing broker.

Additionally, Wakefield embezzled hundreds of thousands of dollars from IFS Securities by falsifying the company’s books and records to create fake commissions that Wakefield knew were not actually owed to him.

Wakefield’s unauthorized trading activities and embezzlement scheme have resulted in significant financial losses for his employer and its counterparties. The exact amount of losses is over $30 million.

The case is being prosecuted by Assistant U.S. Attorneys Sean Franzblau and Bradley A. Tucker, and the U.S. Securities and Exchange Commission provided valuable assistance.

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