U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26004 / May 13, 2024
Securities and Exchange Commission v. Tyrone Johnny Lacy, Jr., Civil Action No. 8:24-cv-01145 (M.D. Fl. filed May 13, 2024)
SEC Charges Florida Man in Fraudulent “Free-Riding” Scheme
The Securities and Exchange Commission announced today that it charged 25-year-old Tyrone Johnny Lacy, Jr. (“Lacy”) of Sefner, Florida with conducting a fraudulent “free-riding” scheme in which he took advantage of credits offered by certain broker-dealers to buy over $300,000 in securities without having funds to pay for them.
The SEC’s complaint alleges that, from at least October 1, 2022 to October 26, 2022, Lacy used a falsified brokerage account application and sham deposits from bank accounts with minimal funds to induce two broker-dealers to provide “instant buying power” credit allowing Lacy to purchase securities. According to the complaint, before Lacy’s fraudulent deposits were reversed due to insufficient funds in his bank accounts, he used the credit extended to him by the broker-dealers to purchase approximately $331,700 in securities. Lacy allegedly withdrew approximately $1,600 in trading profits and left one broker-dealer with a loss of approximately $1,500.
The SEC’s complaint, filed in the United States District Court for the Middle District of Florida, charges Lacy with violating the anti-fraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctive relief, a conduct-based injunction, and civil penalties against Lacy, as well as disgorgement of ill-gotten gains plus prejudgment interest.
The SEC’s investigation was conducted by Jason Spitalnick and supervised by Marc Ricchiute, Nicholas Heinke, and Jason Burt, all of the Denver Regional Office. The litigation will be handled by Mr. Spitalnick and Sharan Lieberman and supervised by Gregory Kasper, Mr. Heinke, and Mr. Burt.