The Securities and Exchange Commission said a former executive for an Atlanta-based broker-dealer has been charged with unauthorized trading that caused his firm to go bankrupt.
Separate actions were filed by the SEC and the U.S. Attorney’s Office against Keith A. Wakefield, former managing director and head of fixed income trading at IFS Securities, Inc.
The complaint by the SEC alleged that Wakefield caused millions of dollars in losses for his firm when he engaged in unauthorized speculative trading in U.S. Treasury fixed income securities. The commission added that Wakefield used fraudulent practices to try to disguise the losses and make it appear that he had achieved fictitious trading profits. Calling him a “rogue trader”, the SEC alleged that Wakefield also fabricated customers on IFS’s books and records in order to fraudulently obtain about $820,000 in commission income from IFS. His fraud ended in August 2019 when IFS could not honor millions of dollars in Wakefield’s securities trades, the SEC said. The firm then had to close and file for bankruptcy.
“As alleged in the complaint, Wakefield engaged in unauthorized speculative trading on behalf of IFS that caused the bankruptcy of the firm and substantial losses to the counter-parties to the trades,” said Kathryn A. Pyszka, Associate Regional Director of the SEC’s Chicago Regional Office. “We will vigorously pursue those who engage in misconduct that undermines the integrity of our markets.”
The SEC charged Wakefield with violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, and also with aiding and abetting IFS’s failure to maintain accurate books and records and operate with sufficient net capital. Criminal charges against him for related misconduct were announced by the U.S. Attorney’s Office.
Wakefield settled the SEC charges by agreeing to pay disgorgement, prejudgment interest and a civil penalty. He also consented to a permanent injunction.
Lewitas Hyman routinely represents investors harmed when financial professionals and their firms engaged in misconduct that caused their clients investment losses. If you think your financial professional or firm engaged in misconduct that caused investment losses, contact the Chicago investor fraud attorneys of Lewitas Hyman to schedule a free consultation by calling (312) 291-4600 or through our online contact form.