SEC Bars Stephen Bond-Nelson Following Alleged “Structured Alpha” Fraud

Stephen Bond-Nelson (CRD #: 2947935) has been barred by the SEC, according to his BrokerCheck record, accessed on July 8, 2022. If you have questions about Stephen Bond-Nelson’s conduct as a broker, read on.

Pending SEC Civil Action

On May 17, 2022, the Securities and Exchange Commission filed a lawsuit alleging that Stephen Bond-Nelson, Gregoire Tournant, and Trevor Taylor engaged in a multibillion-dollar fraudulent scheme while employed by Allianz Global Investor U.S. The SEC alleges that the defendants made “numerous material misrepresentations and other deceptive conduct” concerning Structured Alpha funds sold by Allianz.

Structured Alpha was a complex options trading strategy that used a portfolio of debt or equity securities as collateral to purchase and sell options, primarily on the S&P 500 Index. Stephen Bond-Nelson and Trevor Taylor allegedly helped manage Structured Alpha funds as members of the portfolio management team.

The SEC alleges that, from at least January 2016 through March 2020, the defendants and Allianz materially misled investors by manipulating financial reports and other information concerning the true risk associated with Structured Alpha and the funds’ actual performance.

Allianz allegedly marketed and sold at least 17 Structured Alpha funds to an estimated 114 institutional investors, and as of December 2019, these funds allegedly held approximately $11 billion in managed assets.

After allegedly performing “relatively well” up until March 2020, the Structured Alpha funds allegedly suffered “catastrophic losses, including losses in excess of 90% in certain funds.”

Following this Covid-related market drop, Stephen Bond-Nelson and the other defendants allegedly deliberately concealed their misconduct from SEC investigators. Stephen Bond-Nelson allegedly refused to complete his testimony at first before later cooperating with the investigation.

This lawsuit is currently pending.

Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act

Section 17(a) of the Securities Act prohibits the use of fraudulent schemes, misleading statements, and omissions of material fact in relation to the offer or sale of securities across state lines.

Similarly, Section 10(b) of the Exchange Act prohibits the use of manipulative and deceptive tactics in the purchase or sale of securities.

Section 206(4) of the Advisers Act

Section 206(4) of the Advisers Act prohibits Registered Investment Advisers (RIAs) from misleading investors through various deceptive means, including untrue statements, compensated testimonials or endorsements, and failing to provide a balanced presentation of an investment’s risks and benefits.

Rule 206(4)-8 under this section specifically bans deception and manipulation as they relate to pooled investment vehicles.

Sanctions

On March 3, 2022, Stephen Bond-Nelson pled guilty to the following charges:

• Conspiracy to commit securities fraud, investment adviser fraud, and wire fraud.
• Investment adviser fraud 
• Conspiracy to obstruct justice

These charges are currently pending.

On May 17, 2022, the SEC permanently barred Stephen Bond-Nelson from associating with any of the following:

• Brokers
• Dealers
• Investment advisers
• Municipal securities dealers
• Municipal advisors
• Transfer agents
• Nationally recognized statistical rating organizations (NRSROs)

Also on May 17, 2022, Stephen Bond-Nelson was indefinitely barred from participating in any penny stock offerings.

Discharge from Allianz Global Investors Distributors

On December 13, 2021, Allianz Global Investors Distributors fired Stephen Bond-Nelson after he allegedly violated unspecified firm compliance policies.

Background Information

Stephen Bond-Nelson has passed the following exams:

• Series 63 – Uniform Securities Agent State Law Examination
• SIE – Securities Industry Essentials Examination
• Series 7 – General Securities Representative Examination

In the past, he worked with Allianz Global Investors Distributors (CRD#:25567) and Prudential Investment Management Services (CRD#:18353).

Kurta Law Can Help

If you worked with Stephen Bond-Nelson and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.