A Chicago futures trader and hedge fund manager with a history of disciplinary problems was among the 120 people caught up Wednesday in the largest federal sweep against securities fraud.
Glenn Bradley Laken, 46, a member of the Chicago Mercantile Exchange and principal manager of the TradeVentureFund, faces racketeering, conspiracy, stock fraud and other charges after authorities accused him Wednesday of participating in two illegal investment schemes.
The sweep, resulting from a yearlong undercover investigation, resulted in numerous indictments and criminal complaints, alleging various violent crimes, stock manipulation and other activities that cost investors more than $50 million over five years.
In one of Laken’s cases, the U.S. attorney for the Southern District of New York alleged that a fraudulent investment deal was designed to defraud union pension funds involved in the TradeVentureFund hedge fund.
Laken is charged with making illegal kickbacks to union officials, including one with ties to an organized crime family, in exchange for them influencing their unions to invest in the fund, prosecutors said.
The kickbacks allegedly were to have been funded with excessive trading commissions, generated by churning commodities transactions, and through Laken’s plan to invest the union pension funds in high-risk investments, prosecutors said.
In this scheme, he was charged with racketeering, conspiracy, wire fraud and illegal kickbacks, charges that can carry prison terms ranging from 3 to 20 years.
Laken voluntarily surrendered to authorities in Chicago after he was indicted Wednesday. He was later released on $50,000 cash bond following a brief appearance in U.S. District Court in Chicago.
His lawyer, Sheldon Zenner, emphasized that Laken, of Highland Park, is accused of being what he called “very much a bit player” in the charges.
“The allegations against him are wholly unrelated to any violent conduct or any connection to organized crime,” Zenner said.
Laken was charged in a second incident in which he is alleged to have enlisted Web site operators, among others, to help fraudulently pump up the stock price of FinancialWeb.com, a stock in which he held a large position.
The stock of FinancialWeb.com, a Florida-based company purportedly in the business of creating and operating investment-related Internet services, trades on the OTC Bulletin Board, prosecutors said.
From February through June, prosecutors allege, Laken employed the services of individuals who controlled Web sites, as well as the publisher of a fraudulent newsletter, to promote the stock.
Prosecutors say he concealed that these individuals were paid to promote the stock and his involvement in the arrangement.
He was charged with conspiracy, stock fraud and wire fraud, which can carry terms ranging from 5 to 10 years.
Laken, a principal in three other Chicago companies, has faced disciplinary action before by the Merc.
In 1996, the Merc fined Laken $10,000 and suspended his floor trading privileges for five days after finding he had punched and severely injured another member in a trading pit. The other member was fined $5,000 for berating Laken and instigating the altercation.
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And in 1990, the Merc fined him $30,000 and suspended him for 20 business days after the exchange’s business-conduct committee found that he and a clearing firm employee had executed a prearranged sale of 10 Standard & Poor’s 500 stock-index futures contracts.
Laken is manager of Lake Trading LLC, a commodity-trading adviser and fund operator, according to the National Futures Association. As well, he is president of Lake Futures Ltd., a commodity-trading adviser, and a floor broker and principal with D&G Futures Inc., a firm that solicits and accepts futures orders.