NEW YORK, Feb. 4 (UPI) -- U.S. regulators charged two Wall Street traders Tuesday with a so-called parking scheme used to help one of the traders temporarily hide unsold securities.
The Securities and Exchange Commission said Thomas Gonnella and Ryan King, traders at different firms, moved securities from Gonnella's firm to King's and then traded them back so King's firm would make a profit.
However, the purpose of the scheme was to temporarily hide securities on Gonnella's firm's books, because they would have worked against him when his company calculated bonus pay.
"By parking the securities in King's trading book in order to reset the holding period when he repurchased them, Gonnella's intention was to avoid incurring any charges to his trading points and ultimately his bonus for having aged inventory," the SEC said.
Both Gonnella and King were fired by their respective firms and King is cooperating with authorities, the SEC said in a release.
King has agreed to return profits he made from the scheme -- $22,600 -- and accept banishment from the securities industry for three years. He is also to forfeit $1,503.66 in interest earned from his profits.
By moving the securities around, Gonnella's firm lost about $174,000.
When Gonnella's supervisor began to inquire about the trades, the SEC said, the two schemers used private cellphones to avoid detection.
The began in May 2011 and continued through the summer of that year, the SEC said.