The conspiracy was perpetrated in two ways. In certain transactions, SIEGEL and his co-conspirators misrepresented the seller’s asking price to the buyer (or vice versa), keeping the difference between the price paid by the buyer and the price paid to the seller for RBS. In other transactions, SIEGEL and his co-conspirators misrepresented to the buyer that bonds held in RBS’s inventory were being offered for sale by a fictitious third-party seller, which allowed RBS to charge the buyer an extra, unearned commission.
The investigation revealed numerous fraudulent transactions by SIEGEL and other members of the conspiracy that cost at least 35 victim customers, including firms affiliated with recipients of federal bailout funds through the Troubled Asset Relief Program, millions of dollars.
SIEGEL pleaded guilty to one count of conspiracy to commit securities fraud, which carries a maximum term of imprisonment of five years. He was released on a $250,000 bond and is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on March 11, 2016.