WASHINGTON – James J. O’Neil, a former employee of a now-defunct unregistered firm acting as a broker-dealer, has been suspended from the securities market for 12 months by the Securities and Exchange Commission for his role in a flipping and kickback scheme.
The SEC agreed to the 12-month suspension to settle charges against O’Neil who is 69 and resides in Jupiter, Fla., according to documents released by the commission Thursday afternoon.
O’Neil had been an employee of Core Performance Management LLC, which was dissolved in July 2016.
The SEC alleged that from at least 2009 through 2016, O’Neil purchased newly issued bonds from underwriters in primary offerings, which he immediately sold or “flipped” to the customers of other broker-dealers for profit.
He functioned as an unregistered broker by taking orders for the bonds and then filling the orders with bonds he obtained from underwriters in new offerings, receiving transaction-based compensation for his actions, the SEC said.
O’Neil neither admitted nor denied the charges.
But he settled the charges by agreeing to be enjoined from future violations of the federal securities laws by the SEC and to be barred from the securities market for 12 months.
The sanctions against him appear lighter than those imposed by the SEC on CPM and four other former employees who were enjoined from future violations of fraud and muni rules and indefinitely barred from the market.
Those sanctions were announced earlier on Thursday.
The earlier announced SEC settlements were with CPM, James Scherr, 61, its majority owner and managing director, and former employees Deborah Dora, Sharlene Mesite, and Andrew Pinzon. They also neither admitted nor denied the charges.
In the settlement documents for the firm and four individuals, the SEC said that, in many cases, CPM’s employees obtained the bonds by falsely representing themselves to underwriters and the issuer as retail investors or their representatives, which had a higher priority in purchasing the bonds.
