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Fund Manager Convicted of Advisory Fraud

Courts: Alan B. Bond cheated clients out of millions in a 'cherry-picking' scheme, prosecutors say.

June 11, 2002|GAIL APPLESON | REUTERS

NEW YORK — Alan B. Bond, a prominent money manager who appeared regularly on the television show "Wall Street Week With Louis Rukeyser," was convicted Monday of fraud for cheating pension funds out of millions of dollars.

The Manhattan federal jury took less than an hour to return a guilty verdict on all six counts against Bond, 40, of Upper Montclair, N.J., who was president and chief investment officer of Albriond Capital Management.

U.S. District Judge Leonard Sand ordered that Bond be jailed immediately because of concerns he might try to flee. Sentencing was set for Sept. 9.

Bond, a Dartmouth College and Harvard Business School graduate, once held a top position in the lucrative world of money management. Now he is indigent and was represented by a public defender. During the trial, he was free on bail secured by his parents' modest home in the New York borough of Queens.

Bond was convicted of three counts of investment advisory fraud, which carry a maximum prison term of 10 years each, and three counts of wire fraud, which carry a maximum term of five years each.

Mark Gombiner, Bond's defense lawyer, said he would appeal.

Bond was arrested last year and accused of defrauding clients by sending unprofitable securities trades to their accounts while directing most of the profitable ones to himself.

Prosecutors charged that Bond's "cherry-picking" scheme ran from March 2000 to July 2001 while he was out on bail awaiting trial on 1999 charges of taking more than $6 million in kickbacks from brokerage firms.

He is scheduled to go to trial in November on the kickback charges.

They said Bond made $6.3 million from the cherry-picking scheme while his clients lost more than $56 million.

The government said that the victimized pension funds lost two-thirds of their value, while Bond received a 5,000% return on his own investments in a little more than a year.

"The defense didn't really offer anything in Mr. Bond's defense," Tony Impieri, the jury foreman, told reporters after the verdict. "It was pretty clear-cut."

He said that Bond only hurt himself by testifying during the trial.

"Prior to him taking the stand, I had reasonable doubt. The downfall was when he took the stand.... On cross-examination, he dodged every question; he could not give a straight answer," Impieri said.

Bond rose to prominence managing more than $600 million in pension and investment funds for about 25 clients, including the National Basketball Assn.

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