The US Securities and Exchange Commission (SEC) has charged Daniel Bergin, a senior equity trader at Dallas-based Cushing MLP Asset Management, with front running.
The regulator alleged that the accused wrongfully placed trades using his wife’s accounts, a practice known as front running, before carrying large block trades for companies’ clients, which can increase the stock’s price.
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According to the SEC’s complaint filed in federal court in Dallas, Bergin realized at least $1.7 million in profits in his wife’s accounts from 2011 to 2012 as a result of his front-running trades. More than $520,000 of the $1.7 million represents profits from approximately 132 occasions in which Bergin placed his initial trades in his wife’s account ahead of clients’ trades.
The complaint added that more than $1.8 million was withdrawn since July 2012 from a trading account belonging to Bergin’s wife that was undisclosed to his firm. Most of the withdrawals were large transfers to her bank account.
The SEC’s complaint names Bergin’s wife Jacqueline Zaun as a relief defendant for the purpose of recovering Bergin’s illegal trading profits in her accounts.
In order to halt Bergin’s ongoing scheme, the SEC requested and U.S. District Court Judge Barbara Lynn granted an emergency court order freezing the assets of Bergin and Zaun.
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