Rahul Seksaria, a money manager at Pacific Investment Management Co. running inflation-protection strategies, was dismissed after CME Group Inc. fined him for improper trades.
Mr. Seksaria in April 2012 “orchestrated and prearranged trades in the June 2015 Eurodollar futures contract opposite one of his employer's client suspense account, which resulted in the transfer of $2,675 from the suspense account to his personal trading account,” CME, operator of the world's biggest futures market, said on its website. CME this month barred him from using its markets until after March 19, and ordered Seksaria to repay the $2,675 as well as a fine of $65,000.
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“Mr. Seksaria had traded in his personal account on the other side of Pimco client accounts, and profited from that activity — a clear violation of the firm's policies,” Daniel Tarman, a spokesman for Newport Beach, Calif.-based Pimco, said Tuesday in an e-mailed statement. “While the amount involved in this matter was small, Pimco's code of ethics mandates that all employees must abide by the highest standards of personal and professional conduct.”
Mr. Tarman said Mr. Seksaria did not remove client assets, which are held at third-party custodian banks.
Mr. Seksaria's last day at Pimco was Dec. 19. Two small funds run by Mr. Seksaria, the Pimco Real Income Fund 2029 Fund and the Pimco Real Income Fund 2019 Fund, were liquidated Nov. 14, according to data posted on Pimco's website. The two funds had less than $20 million in combined assets at the end of October.
REDUCING EXPECTATIONS
Mr. Seksaria didn't return emails or messages sent through his LinkedIn account. A phone number listed in the directory under his name was disconnected, and Pimco didn't provide any contact details for him.
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Mr. Seksaria was a senior vice president, trader and money manager at Pimco. He focused on strategies designed to adjust for inflation, such as investing in Treasury Inflation Protected Securities, according to a fund filing last year. Before joining Pimco in 2002, he worked in trading and structuring in energy and other commodities at Enron Corp.
He was added to the management team of the Pimco Tax Managed Real Return Fund in September, according to a regulatory filing. As of October, he was listed as one of 15 members of the firm's Portfolio Committee in the Americas, according to a presentation on the website of the State Universities Retirement System of Illinois.
Bond traders have reduced inflation expectations this year as oil prices have tumbled and the dollar has climbed, making it cheaper for consumers in the U.S. to buy goods from abroad. A measure of the outlook for annual inflation over the 10-year period derived from yields on TIPS, known as the break-even rate, fell to 1.64 percentage points from 2.31 percentage points in January.
