Millennium Trader Settles Fraud Charges

A former senior trader of hedge fund group Millennium Partners agreed to pay $570,000 to settle fraud and other charges tied to the $5-billion hedge fund group’s improper mutual fund trading, the Securities and Exchange Commission said Wednesday.

Steven Markovitz, who was among the early targets of New York Atty. Gen. Eliot Spitzer’s and the SEC’s investigations of mutual fund trading abuses, agreed to the settlements without admitting or denying the charges.

Markovitz agreed to pay $400,000 to settle fraud charges and an additional $170,000 to settle charges that he violated a previous SEC order barring him from associating with investment advisors.

“It was a pretty blatant violation of the bar,” said Bruce Karpati, assistant regional director in the SEC’s New York office.

Markovitz’s attorney said his client was happy the matter was behind him.

Millennium settled with regulators last year, with the fund, related entities and senior executives agreeing to pay $180 million.

The SEC said that from 1999 to 2003 the fund and its principals generated tens of millions of dollars in profit for Millennium by engaging in deceptive market timing in which traders exploited pricing inefficiencies.