Anthony Blumberg, former CEO of ConvergEx Global Markets, a now-shuttered broker-dealer subsidiary of ConvergEx Group, pleaded guilty Tuesday to federal charges of concealing fees to buy and sell securities, according to the Justice Department.
Mr. Blumberg made the plea in U.S. District Court in Newark, N.J, where he faced charges from the Justice Department and the Securities and Exchange Commission on one count of securities and wire fraud, according to a Justice Department news release.
Sentencing is scheduled for Dec. 5.
Mr. Blumberg, along with Craig Marshall, former senior vice president of Bermuda-based ConvergEx Global Markets, were indicted in August 2014 by a federal grand jury and were named in a civil case filed by the Securities and Exchange Commission in U.S. District Court in Newark. Mr. Marshall pleaded guilty to the charges in April 2015.
The indictment and SEC lawsuit claimed Mr. Blumberg would route orders to an offshore affiliate in Bermuda to add markups or markdowns through hidden fees known as "trading profits" or "spreads." Those fees were added to commissions paid by customers.
Both the SEC and the Justice Department alleged Mr. Blumberg also made false and misleading statements to a brokerage customer and authorized employees to falsify trading data for customers who inquired about the details of their securities transactions.
The status of the SEC civil suit could not be immediately learned.
ConvergEx Group and CGM in December 2014 agreed to pay a total of $43.8 million in criminal penalties and restitution to settle earlier fraud charges from the SEC and the Justice Department. ConvergEx Group is not named in the latest SEC and Justice Department actions.
ConvergEx Global Markets was closed in 2011.
