Two former senior executives of a Boston-based financial services company have been charged with engaging in a scheme to defraud at least six of the bank's clients.
Ross McLellan, 44, of Hingham, Massachusetts, and Edward Pennings, 45, who is believed to be living abroad, were charged in a five-count indictment with conspiring to commit securities fraud and wire fraud, as well as two counts each of securities fraud and wire fraud.
"The secret conversations and backroom plotting laid bare in today's charges paint a vivid picture of a brazen fraud," says U.S. Attorney Carmen Ortiz. "With each trade, they chipped away at the savings of thousands of retirees whose pensions they were charged with safeguarding."
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"The defendants are charged with reaping millions of dollars of illicit profits by abusing their clients' trust and secretly setting their own inflated compensation," says Assistant Attorney General Leslie Caldwell.
The indictment alleges that, between February 2010 and September 2011, McLellan and Pennings, formerly of State Street Corp., together with others, conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank's "transition management" business.
The ongoing investigation is being conducted by the FBI.