SEC Sanctions Trader for Accepting Gifts in Violation of the Investment Company Act

August 5, 2011

The SEC upheld an administrative law judge's determination that Robert L. Burns, a former equity trader at FMR Co., Inc., a registered investment adviser, had willfully violated Section 17(e)(1) of the Investment Company Act of 1940 by accepting compensation from brokerage firms to which he transmitted orders to buy and sell securities on behalf of certain mutual funds that were advisory clients of FMR. The SEC found that, from 2002 through 2004, Burns sent securities transactions involving more than 2 billion shares to ten firms from which he accepted at least thirty-nine gifts, including wine, travel, and tickets to various concerts, sporting events, and theater productions. For his violations, the SEC sustained the law judge's decision censuring Burns and ordering him to cease and desist from committing future violations. The SEC also ordered Burns to disgorge $141,822.50 and imposed a civil penalty of $40,000.

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Categories

Enforcement Actions, Investment Advisers, Investment Companies