U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18579 / February 17, 2004
SEC v. Suheil M. Judeh, Civil Action No. C 04 0322 L (W.D. Wash.).
SEC CHARGES SEATTLE MAN WITH FRAUDULENT STOCK TRADING USING FALSE OR STOLEN IDENTITIES AND BROKERAGE ACCOUNTS
The U.S. Securities and Exchange Commission announced today that it has filed an action in federal court charging a Seattle day-trader, Suheil M. Judeh, with fraud in violation of the federal securities laws.
The Commission's Complaint charges Judeh with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The Commission seeks an order enjoining Judeh from future violations of these provisions, requiring him to disgorge his ill-gotten gains, and requiring him to pay civil money penalties.
The Complaint alleges that Judeh opened a series of brokerage accounts using stolen and false identities and forged checks. Judeh used these accounts to buy and sell securities with himself, through another brokerage account he held in his own name. Judeh structured the trades so that the account in his name consistently made money, while the accounts under false or stolen identities (the "nominee accounts") incurred losses. Because Judeh had opened the nominee accounts using forged checks, the losses were incurred by the brokerages, and not by the individuals whose identities were stolen.
Judeh's offers to buy and sell securities through the nominee accounts were fraudulent because he never intended to pay for the trading losses he accumulated in the nominee accounts. Moreover, because Judeh's trades were publicly reported, they gave the false appearance of legitimate market activity to other traders in those securities. Judeh's illegal trading scheme, which ran from at least May through June 2002 and March through July 2003, netted profits of approximately $95,000.