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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20308 / September 27, 2007

SEC v. Charles P. Trigilio, Case No. CV-07-06269-CAS (AGR) (C.D. Cal. filed September 27, 2007)

SEC Sues to Halt Fraudulent Options Trading Scheme

The Securities and Exchange Commission today filed fraud charges against an Arcadia, Calif., investment adviser who misappropriated millions of dollars from investors to whom he had promised huge returns through "no risk" options trading. According to the Commission, investment adviser Charles Trigilio withdrew more than $3.4 million from his clients' accounts for his personal use, transferred money from one client to another in a classic Ponzi scheme tactic, and gave clients false information about their investments to hide the losses from his spectacularly unsuccessful trading strategy.

According to the Commission's complaint, filed today in federal district court in Los Angeles, Trigilio has managed at least 96 brokerage accounts belonging to dozens of investors at a number of different brokerage firms since at least 2003. He concealed his identity from the brokerage firms, pretending to be the investor when making trades and transferring money from their accounts to himself and others. The Commission alleges that Trigilio misappropriated $3.1 million from investor accounts at one brokerage firm alone, transferring the money to bank accounts held in his name or the name of his wife and her business.

The Commission's complaint further alleges Trigilio fraudulently concealed the large losses he incurred trading options in his clients' accounts. Between January 2006 and September 2007, the accounts handled by Trigilio at one brokerage firm suffered nearly $2 million in trading losses. According to the Commission, Trigilio concealed the losses from investors by providing them with phony account information. He further hid his fraud by using money obtained from several clients to pay promised returns. Among other things, the Commission alleges he concealed his activities by using his clients' personal information to establish and control their brokerage accounts while requiring clients to agree not to directly contact the brokers themselves.

The Commission's complaint charges Trigilio with violating Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder and Sections 206(1) and 206(2) of the Investment Advisers Act, and seeks preliminary and permanent injunctions, disgorgement, and civil penalties. The Commission further seeks disgorgement of all investor funds disbursed to relief defendant, Razel Trigilio. In addition, the Commission is seeking an order temporarily prohibiting Trigilio from further trading in the brokerage accounts of his investor clients in order to manage and preserve any remaining investor funds. If granted, the federal district court's order would also freeze the assets of Trigilio as well as the assets of his wife, Razel Trigilio, who received thousands of dollars in investors' money from Trigilio.

SEC Complaint in this matter

 

http://www.sec.gov/litigation/litreleases/2007/lr20308.htm


Modified: 09/27/2007