A trader who bankrupted the broker-dealer he worked at by losing more than US$30 million via unauthorized speculative bond trading has been sentenced to prison after being convicted on fraud charges.
In 2024, a jury convicted Keith Wakefield — the former head of fixed-income trading for Atlanta-based IFS Securities Inc. — of securities fraud and wire fraud in connection with unauthorized trading in U.S. Treasury bonds using the firm’s accounts, which resulted in hefty losses for the firm and its counterparties.
“Wakefield attempted to conceal the unauthorized trades and losses by entering fake off-setting trades into a clearing broker’s order system, creating the false impression that he had profitably traded through a different clearing broker,” said the U.S. attorney’s office for the Northern District of Illinois.
Additionally, it said that between 2017 and 2019, Wakefield “embezzled hundreds of thousands of dollars from IFS Securities by falsifying the company’s books and records to create fake commissions that Wakefield knew were not actually owed to him.”
Ultimately, the firm filed for bankruptcy in 2019.
In 2021, Wakefield was charged for his conduct that led to the firm’s demise. And, in a parallel proceeding, the U.S. Securities and Exchange Commission (SEC) also charged Wakefield with violating securities rules by engaging in unauthorized trading and fraudulently claiming US$820,000 in fictitious commission income.
Wakefield settled the SEC’s charges by consenting to a permanent injunction and agreeing to pay disgorgement plus interest, along with a civil penalty, in amounts to be determined by the court.
Now, in the criminal case against him, Wakefield has been sentenced to 16 years and eight months in federal prison by a U.S. district court judge.