SEC v. Daniel Bergin, et al., Case No. 3:13-cv-1940 (D. TX.). On May 24, 2013, the SEC announced it filed an emergency action and obtained an asset freeze against Daniel Bergin, an equity trader at Cushing MLP Asset Management. According to the SEC, Bergin was responsible for managing his clients’ exposure to market price risks by placing large client orders designed to minimize unfavorable price movements against client interests. The SEC alleges that Bergin secretly executed hundreds of trades through his wife’s accounts in a practice known as front running. He made about $520,000 by purchasing securities in his wife’s accounts earlier the same day he placed much larger orders for the same securities on behalf of firm clients. Bergin hid the trades by failing to disclose his wife’s accounts to the firm thereby avoiding pre-clearance of his trades. Bergin also attempted to hide his wife’s accounts from SEC examiners. The SEC also named Bergin’s wife as a relief defendant for the purpose of recovering illegal profits in her accounts. The SEC charged Bergin with violating Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5 along with Section 17(j) of the Investment Company Act and Rule 17j-1 thereunder. The SEC seeks injunctive relief, disgorgement, and a civil monetary penalty.
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