A former ConvergEx trader has pleaded guilty to one count of conspiracy to falsify the books and records of a broker-dealer.
Michael Craig Marshall admitted that clients placed orders to buy or sell securities with G-Trade, a registered US broker-dealer and subsidiary of ConvergEx Global markets, then routed the orders to CGM Limited. He added that traders at ConvergEx regularly added a mark-up or mark-down when executing the orders.
Marshall said that he and the other coconspirators falsified G-Trade’s books and records, highlighting falsified transaction reports for two trades executed in August 2009 to verify that the falsified data regarding the quantities, prices and times of the purchases reflected on the report matched actual trades that had been executed on the market on 7 August 2009, by both G-Trade’s client and other market participants.
The reports hid the fact that spread had been taken on the brokerage orders, Marshall admitted. These reports were later provided to G-Trade’s client.
On 18 December 2013, Jonathan Daspin, the head trader at CGM Limited, Thomas Lekargeren, a sales trader at a different ConvergEx subsidiary, and CGM Limited each pleaded guilty to conspiracy to commit securities and wire fraud.
On the same day, ConvergEx Group entered into a deferred prosecution agreement. Collectively, the two ConvergEx entities paid $43.8 million in criminal penalties and restitution.