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WASHINGTON (AP) - Securities regulators filed civil fraud charges against Kenneth Pasternak, the former chief executive and head of trading at Knight Securities LP, and another former Knight executive, alleging they defrauded the company's institutional customers.
Pasternak and John Leighton, former head of the institutional-sales desk at Knight, received millions of dollars of compensation from "lucrative trading" whose profits far exceeded the industry norm, the Securities and Exchange Commission said. The agency's complaint, filed in federal court in New Jersey, seeks to fine the two men and force them to return their allegedly ill-gotten trading gains.
Knight, now known as Knight Equity Markets, settled last year with the SEC and the National Association of Securities Dealers and agreed to return more than $79 million. The Jersey City, N.J., firm was one of the largest market makers in Nasdaq-listed stocks.
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