SEC v. James Patrick Connelly Jr., No. LR-18541 (Dec. 17, 2003) — Press Release
raw: James Patrick Connelly Jr.
James Patrick Connelly Jr., No. LR-18541 (Dec. 17, 2003)
James P. Connelly Jr., former Vice Chairman of Fred Alger Management Inc., was sentenced to 1–3 years in prison for tampering with evidence by deleting subpoenaed emails during an investigation into his facilitation of illegal mutual fund market timing in exchange for 'sticky assets,' and was barred from the securities industry with a $400,000 civil penalty by the SEC.
James P. Connelly Jr. pled guilty to a New York State Class E felony for tampering with evidence by directing subordinates to delete emails subpoenaed by the New York Attorney General and the SEC during an investigation into mutual fund market timing. The SEC found he violated federal securities laws by permitting select investors to time Alger mutual funds in exchange for maintaining at least 20% of their investments as 'sticky assets.' As part of a settlement, he consented to an SEC order barring him from the securities industry, imposing a $400,000 civil penalty, and requiring a cease-and-desist order, without admitting or denying the allegations.
James P. Connelly Jr., former Vice Chairman of Fred Alger Management Inc., was sentenced to 1–3 years in prison on December 17, 2003, for tampering with evidence in violation of New York State law, after admitting to directing subordinates to delete emails subpoenaed during a joint investigation by the New York Attorney General and the SEC. The investigation uncovered that Connelly facilitated illegal market timing of Alger mutual funds by allowing select investors to trade frequently in exchange for maintaining at least 20% of their investments as 'sticky assets,' a practice that violated federal securities laws. On October 16, 2003, he pled guilty to the state felony charge and simultaneously consented to an SEC order that barred him from association with any broker, dealer, or investment adviser, prohibited him from serving in key roles at registered investment companies, and imposed a $400,000 civil penalty—without admitting or denying the SEC’s findings. His criminal conduct specifically involved obstructing the investigation by destroying evidence, which under New York law carries a maximum sentence of four years. The SEC’s administrative order and the state criminal conviction were part of a broader crackdown on mutual fund abuses in the early 2000s. Connelly’s case highlighted the intersection of criminal obstruction and securities fraud in the mutual fund industry. His admission under oath before Judge James Yates in Manhattan confirmed the extent of his role in the cover-up.
Extracted insights
- $400K $400,000 $100K–$1M
- organization The Commission
- agency the securities and exchange commission
- The Securities and Exchange Commission announced that on December 17, 2003, James P. Connelly Jr. was sentenced to 1 to 3 years in prison for tampering with evidence
- James P. Connelly Jr. was sentenced to 1 to 3 years in prison for tampering with evidence
- Connelly served as Vice Chairman of Fred Alger Management Inc.
- Connelly pled guilty on October 16, 2003, to one count of Tampering with Physical Evidence, a Class E felony
- the Commission issued an order that Connelly had violated the federal securities laws by permitting select investors to "time" Alger mutual funds
- Connelly had violated the federal securities laws by permitting select investors to "time" Alger mutual funds
The Securities and Exchange Commission announced that on December 17, 2003, James P. Connelly Jr. was sentenced to 1 to 3 years in prison for tampering with evidence. Connelly, the former Vice Chairman of Fred Alger Management Inc., had pled guilty on October 16, 2003, to one count of Tampering with Physical Evidence, a Class E felony, in violation of New York State law. Also on October 16, 2003, the Commission issued an order finding that Connelly had violated the federal securities laws by permitting select investors to "time" Alger mutual funds in exchange for maintaining at least 20% of their Alger investment in buy-and-hold positions, sometimes referred to as "sticky assets." The Commission directed Connelly to cease and desist from future violations of various provisions of the federal securities laws; barred him from association with any broker, dealer or investment adviser; barred him from serving in various capacities with respect to any registered investment company; and imposed a $400,000 civil penalty. Connelly consented to the Commission order without admitting or denying the findings. The criminal charges against Connelly stemmed from his repeated efforts to tamper with an ongoing investigation by the New York Attorney General and the Commission of illegal trading practices in the mutual funds industry, including by directing subordinates to delete emails called for by subpoenas. Connelly had admitted his conduct under oath before the Hon. James Yates of the Supreme Court of New York State in Manhattan. New York's statute outlawing tampering with evidence calls for a maximum sentence of 4 years in state prison. For additional information, see Securities Act Release No. 33-8304 (Oct. 16, 2003) and Administrative Proceeding File No. 3-11303 (Oct. 16, 2003). http://www.sec.gov/news/press/2003-138.htm http://www.sec.gov/litigation/admin/33-8304.htm
The Securities and Exchange Commission announced that on December 17, 2003, James P. Connelly Jr. was sentenced to 1 to 3 years in prison for tampering with evidence. Connelly, the former Vice Chairman of Fred Alger Management Inc., had pled guilty on October 16, 2003, to one count of Tampering with Physical Evidence, a Class E felony, in violation of New York State law. Also on October 16, 2003, the Commission issued an order finding that Connelly had violated the federal securities laws by permitting select investors to "time" Alger mutual funds in exchange for maintaining at least 20% of their Alger investment in buy-and-hold positions, sometimes referred to as "sticky assets." The Commission directed Connelly to cease and desist from future violations of various provisions of the federal securities laws; barred him from association with any broker, dealer or investment adviser; barred him from serving in various capacities with respect to any registered investment company; and imposed a $400,000 civil penalty. Connelly consented to the Commission order without admitting or denying the findings. The criminal charges against Connelly stemmed from his repeated efforts to tamper with an ongoing investigation by the New York Attorney General and the Commission of illegal trading practices in the mutual funds industry, including by directing subordinates to delete emails called for by subpoenas. Connelly had admitted his conduct under oath before the Hon. James Yates of the Supreme Court of New York State in Manhattan. New York's statute outlawing tampering with evidence calls for a maximum sentence of 4 years in state prison. For additional information, see Securities Act Release No. 33-8304 (Oct. 16, 2003) and Administrative Proceeding File No. 3-11303 (Oct. 16, 2003). http://www.sec.gov/news/press/2003-138.htm http://www.sec.gov/litigation/admin/33-8304.htm