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Rating:STC Executives Plead Guilty Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, August 30, 2005

STC Executives Plead Guilty

Reported by Theresa Sim

Grant Seeger, the former chief executive officer of Security Trust Corp., pled guilty to one count of grand larceny and one count of violation of general business practices in exchange for an offer from the New York Attorney General's office headed by Eliot Spitzer.

Seeger will pay a fine of $50,000 and serve five years of probation.

Ex-STC president William Kenyon accepted a similar offer during a Tuesday morning hearing at the New York State Supreme Court in lower Manhattan. Kenyon plead guilty to one count of violation of general business practices. He also faces five years of probation and a $50,000 fine.

Both are also banned from serving as a fiduciary on an employee benefit plan for any company other than their own. Both will be sentenced on October 27.

Former CIBC banker Paul Flynn, however, did not plead guilty and is slated for trial beginning on September 26.

Both Seeger and Flynn, outfitted in matching navy pinstriped suits and light blue ties, appeared in front of Judge James Yates to swear to the terms of the AG's offer. Seeger was accompanied during the hearing by his wife, Beth.

As part of the offer, Seeger read aloud a paragraph from the offer where he admitted to helping Samaritan and Canary Capital disguise their trades as 401(k) trust account trades to the mutual funds. He also stated he "discussed this trading with Paul Flynn."

Kenyon admitted to "piggybacking," a term Seeger used to describe disguising the hedge fund trades through 401(k) omnibus accounts. Kenyon also stated that he oversaw the development of software that allowed STC to piggyback trades.

After the hearing, Susan Necheles, Seeger's attorney, said that Flynn would proceed with his trial.

"He's so angry about this," said Necheles, about Flynn. "Nobody believed this was criminal," said Necheles, adding that the defendants were simply "putting a trade through omnibus accounts."

After the court session Seeger spoke about the events.

"I'm very glad to have this part done so I can be at home with my wife and kids," said Seeger, after the hearing.

"I'm trying to get my life on track," said Seeger.

So will the fund industry be seeing more of Seeger? "I haven't decided yet" whether to rejoin the fund industry, said Seeger. 

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