The Securities and Exchange Commission has filed a lawsuit in Pensylvania federal court charging transition management brokerage Global Transition Solutions of charging over $13 million in hidden fees by coordinating with routing brokers to impose markups on the transactions and splitting the proceeds. One of the routing brokerages used by GTS is Bermuda-based ConvergEx Global Markets Limited.
Also sued in the action were three of GTE’s execs. The allegations stated that most bilked were typically public pension funds. GTS is a consulting business which helps customers including retirement funds for municipal employees such as police and fire departments to execute large securities transactions . GTS execs CEO John Place, COO Paul Kirk and President John Kirk all had securities licenses.
The SEC alleges that GTS would place customer orders with a routing broker who would impose markups on the trades and split the proceeds with GTS. The SEC says that the markups were undisclosed.
The case is SEC v. Place et al. case number 2:16-cv-04291 in the United States District Court for Eastern Pennsylvania.
Jeffrey Newman represents whistleblowers