Middle Office Trader Barred for Helping Conceal Commissions 

A middle office employee was barred from the industry and fined for assisting his brokerage team with collecting false markups, thereby taking more than $18 Million in unlawful profits from customers.  The SEC charges the respondent with negligently communicating false execution information to clients, which allowed his cash desk team to embed secret markups and markdowns.  His firm and senior members of the team were also prosecuted.  The SEC asserts that the respondent “was negligent in that he should have known that the confirmations sent to customers contained false and/or misleading information and omitted the markups/markdowns.”

OUR TAKE: More junior employees cannot escape liability by claiming they were just following orders.