SEC Brings Failure to Supervise Case Involving Interpositioning

December 23, 2011

The brought charges against Investment Placement Group (IPG) and its CEO, Adolfo Gonzalez-Rubio,. The SEC found that IPG and Gonzalez-Rubio failed reasonably to supervise a former IPG trader engaged in a fraudulent interpositioning scheme involving parties in Mexico from January to November 2008. The SEC found that the scheme went undetected by IPG due to its failure to establish adequate policies and procedures and a system for implementing procedures which would reasonably be expected to prevent and detect interpositioning within the meaning of Section 15(b)(4)(E) of the Exchange Act and Section 203(e)(c) of the Advisers Act. The SEC further found that Gonzalez-Rubio effectively allowed the trader to supervise himself, failing to respond to red flags, including a dramatic rise in IPG’s revenue resulting from the interpositioned transactions within the meaning of Section 15(b)(4)(E) as incorporated by Section 15(b)(6) of the Exchange Act and Section 203(e)(c) of the Advisers Act.

Click here to access the administrative action.


Categories

Enforcement Actions, Investment Advisers