SEC Charges Massachusetts Portfolio Manager with Fraud

US authorities have accused a Massachusetts hedge fund manager with fraud for allegedly misrepresenting nearly $2 million that the firm had under management and diverting investor capital to an unauthorized personal trading account. The US Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission today filed related civil charges against the defendant.

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Kevin J. Amell was criminally charged with securities fraud, wire fraud and conspiracy. In addition to the civil charges filed against him by the SEC, the US Attorney’s Office for the Massachusetts District has reportedly also filed parallel criminal charges against Amell.

According to the SEC’s complaint, Amell schemed matched-trades to divert almost $2 million from the brokerage accounts of the fund to his own account at prices more favorable to him but at the fund’s expense. Internal documents uncovered during the investigation showed that he made a $23,000 profit for himself in less than 23 minutes in one series of trades involving Amazon securities.

According to Kevin J. Amell’s LinkedIn profile, he was appointed in 2012 as a portfolio manager of Eaton Vance Management (EVM), investment adviser to Eaton Vance Risk-Managed Diversified Equity Income Fund (NYSE: ETJ). Mr. Amell was tasked with managing the fund's options overlay program and collaborating with the other managers to direct the fund's overall investment program. Kevin joined EVM as an equity options trader in 2009. He was previously a senior trader at Numeric Investors and Jacobs Levy Equity Management.

Joseph G. Sansone, Co-Chief of the SEC Enforcement Division’s Market Abuse Unit, noted: “As alleged in our complaint, Amell abused his trading authority at least 265 times by matching trades between the fund and his personal account at prices that he intentionally and fraudulently skewed to benefit himself.”