Free Declaration - District Court of Arizona - Arizona

EXHIBIT U
Case 2:03-cv-02323-JWS Document 115-22 Filed O7/26/2007 Page 1 013 .

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__.» _ __ PLEA AGREEMENT " ‘
1, This document sets forth thc tc1ms`undcr which Grant Sccgor will cntcr a plcu of guilty to I
' (1) Grand Larccny in the Second Dcgrcc, in violation of Penal Law § 155-40, a lesser
included offcnsc of Count Thirteen of thc Indictment and a class C felony, and (2) Count
` ` Forty, violation ofGcncral Business Law § 352-c(6), a class E Felony.
U 2. At thc time ofthe plca, Mr. Seeger shall withdraw all pending motions and- waive all ° `
right to appeal. . _ ` ,
3. Upon Mr. Sccgcfs guilty plea, he will allocutc under oath concoming the following
facts: ‘
4 » From in our about 20001to 2003, Mr, Seeger was thc CEO of Security Trust
‘ _ éompany, located in Arizona. STC processed mutual iimd trades, primarily on
’ bclgélf of rctircmcnt funds. A share of a mutual fund is a type of security which is ·
_ _ sold to thc public. STC’s mutual fund trades were processed through National
- Securities Clearing Corporation in New York County, New York. In ZOQO, Mr.
A Seeger was contacted by two hcglgofunds that were engaged in markot tirnjng -`_ 1
. ~ Samaritan and Canary. ,Th%$é§éilgo iimds wanted to use STC to process thcir
A =_ ` ‘ ttadcsto the mutual funds. Th€:;fc€son they wanted to do this was to attempt to g
V A hide from tlrc mutual ilmds thc fact {hat. they wcremarkct timing.
' `'C. J ‘ ·. From approximately May 2000 to Septembor 2003, Seeger agreed to causc
STC to process these rmdcs on behalf of Samaritan and Canary. Mr. Seeger also ’ .
asked Mr. Kenyon to oversee the development of Soiivvaxc that would allow the ·
creation of omnibus accounts, thereby allowing thc hedge iimds’ trades to be
` _ hidden among thc tmdes made by retirement and pension plans which were bcing - ·
- _ ` — processed by STC. Mr. Seeger and others at STC referred to this as
_ · _ · "piggybaclcing.” Mr. Seeger later learned that some of these trades were · _ _
‘ Submitted through Lam Research 401K Saving Plus Plan's_account, Mr. Seeger I
lcncw that mutual funds had known that the money was. from hedge funds and _
-_ . __ that thc hedge were market timing,_· porno of rho mutual funds would hzgvq - . `
- yr · ·- . . · ._ féiixéed toqllow meséjmags tooccur. Mr. Seeger now stipulates ihzit oi1¢§.0f . "
· _ `thosc was Fidelity Aglvisor,Fumls. The value of those: trades with Fidélity
W _ . ‘ . Advisor Funds orccccdcd Hiiy thousandi dollars. A ” Q
_ ‘ ·Wil1iam-Kenyon thcprcsidont of ST He; know o£_1l1csc;mik1¢s‘ and n Q , A N j
_ ' ‘ A &W’8l?€ fhhtthcy work being processed amaungr go dg cause rho rnrrluziliimd. , _ ’* 1
_ · A vompariiés to bclicvc that This was money from retirement accounts, and h6 _ *
“ _4 ‘ participated in cnusing thc trades to bc processed in this mzmnér. . A A _ , g
L ` Mr. Sccgcr also. discussed thié trading with-PaulFJlym1“from CIBC. Mr. Flynn W
‘ - —l_a _P learned rhat §TC was processing tradcs trom pension planstogcthcr with prlvqffc - · ;
_4__ ,1 _ hcdgc Hmd$ IH omnibus accounts, or "piggyba¤king” the trades, in ordcr to hide · · . j
·_ the Iruc identity of the traders from the mutual fund companies. · · ‘ ;
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`A 4. Mr. Seeger’s guilty plea to the count described in paragraph 1, above, shall be inafull
· satistaction ofthe conduct to which he has allocuted and covers conduct in which he may
have engaged between 2000 and 2003 in connection with S"l`C’s use of fraudulent and _
deceptive practices in the promotion of the purchase and sale of securities, and conduct
set forth in indictments 7449/2003 and 2686/2004. _ A
_ 5. Following Mr. Seeger’s allocation as set forth in paragraph 3, and upon the Court‘s
i acceptance ofthe plea, the People will recommend that Mr. Seeger be sentenced to a _
tive—year term of probation, and a fine of $50,000. If Mr. Seeger does not receive a
sentence of probation with nojail time, he will be permitted to withdraw his plea and
nothing contained in this document, nor any of his statements made as a result of this
agreement, or any statements made by his attorney, will be admissible in evidence against
him. F · g
6. Mr. Seeger agrees that he will never again act as a fiduciary or service protiider to any i
ERISA—<>0Vered employee benefit plan, whether directly or indirectly, or through or with i
_ any agent, entity, or individual; and that during the period of probation imposed by the ·
· Court it shall be a condition thereof that he comply with this provision, except that he » _ ?
`shall bepennitted to own a business or be associated witha business that has an ERISA_ f
covered employee benefit plan, and to be an agent or iiduciary of that plan. _ _ i
l‘l)ated: NewiYork, New York l / —
i August 30, 2005 ‘ ‘ ,
V _ __ ll ; ‘
Grant " eger - A
i _ ` -~-- S ‘``.·‘ __ _·,· · ·"
_- . ._ ., lggi-Esq; ‘ W _·
· _ ‘ Q ‘ _ " ‘ ‘ 1 or Grant Seeger ` ` _ _ }
v_ - -· ‘ _ r Laurie ‘ Israel, Esq., 1 ttorney General
_ . · _ . on behalf of Elliot Spitzer, Esq. · ‘ " `
` _ . ‘ Attorney General, State of New York · ·
5 ‘ i ‘ ° . ` _ ` rornpg-B6`!
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