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Matthias Knab, Opalesque:

The Securities and Exchange Commission (SEC) has officially closed the chapter on one of the largest trading fraud cases in recent years. The Fair Fund established in the ConvergEx case has been terminated after successfully distributing over $110 million to harmed investors.

Background:

In December 2013, the SEC charged G-Trade Services LLC, ConvergEx Global Markets Limited, and ConvergEx Execution Solutions LLC with engaging in a fraudulent scheme from 2006 to 2011. The firms were found to have concealed their practice of routing certain global trading and transition management customer orders to an offshore affiliate, allowing them to charge undisclosed mark-ups and mark-downs in addition to disclosed commissions.

Key Points:

Total Penalties: The respondents were ordered to pay $107,424,429, including $79,802,448 in disgorgement, $7,621,981 in prejudgment interest, and a $20,000,000 civil penalty.

Fair Fund Creation: A Fair Fund was established to distribute the collected funds to affected investors. Additional funds from related cases were also added, bringing the total to over $110 million.

Distribution Process: The fund administrator, Epiq Class Action and Claims Solutions, Inc., distributed $111,766,223.02 in six tranches. Impressively, 98.5% of this amount ($110,135,983.74) was successfully disbursed to 2,034 affected investors.

Investor Compensation: Harmed investors received full ......................

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