Yesterday the Securities and Exchange Commission ordered cease-and-desist proceedings against James E. Otto, 51, from Overland Park.

The SEC Division of Enforcement alleges that Otto, an insurance salesman in Kansas and Missouri, violated the broker-dealer registration provisions of the Exchange Act by acquiring trading authority on numerous customer accounts at TD Ameritrade and using that authority to liquidate millions of dollars worth of securities.

The SEC also alleges that Otto violated the anti-fraud provisions of the Exchange Act by concealing his identity from TD Ameritrade in order to effect trades in customer accounts after TD Ameritrade had terminated his trading authority.

Finally, the SEC alleges that Otto violated the anti-fraud provisions of the Advisers Act by impersonating an advisory client when communicating with TD Ameritrade.

From approximately 1986 through 2002, Otto was employed as a registered representative of several registered broker-dealers. Otto was barred from the industry for two months in 2002 by the New York Stock Exchange and he did not associate with another registered broker-dealer thereafter. At all times relevant to these proceedings Otto was licensed to sell insurance products in the states of Missouri and Kansas.

The SEC order says a public hearing must be held within 30-60 days.

Related

• “In the Matter of James E. Otto” in the SEC’s press release
• SEC order