SEC v. Ficken, No. 07-2532 affirms a grant of summary judgment to the SEC and against a broker for Prudential in a case brought under 15 U.S.C. § 77q(a), 15 U.S.C. § 78j(b), and 17 C.F.R. § 240.10b-5, in which the SEC argued that “Ficken intentionally concealed his identity and the identities of his clients while trading shares of mutual funds, in order to mislead mutual fund companies into processing trades that they otherwise would not have allowed.” There is the usual discussion of Scienter. Ficken was trying game the lag-time between prices of shares and funds that hold them. This isn’t illegal, but mutual funds don’t like it. To get around this, Ficken used different ID numbers.
There is a paper trial and transcripts of NASD proceedings where he plead the Fifth. The First says “Ficken’s refusal to answer pertinent questions in the NASD proceeding bars his reliance on that testimony in opposing summary judgment” and therefore, “Ficken’s testimony would not be admissible because his assertion of his Fifth Amendment privilege or his refusal to answer questions prevented development of his testimony on closely related issues.” It then discussed how he became unavailable.