U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23830 / May 11, 2017
Securities and Exchange Commission v. Chamroonrat, et al., Civil Action No. 16-CV-9403-KM-JBC (D.N.J. filed December 21, 2016)
SEC Names Additional Defendants in the Nonko Trading Fraud Case
On May 11, 2017, the Securities and Exchange Commission filed an amended complaint in its pending action against operators of the phony day-trading firm Nonko Trading, charging Yaniv Avnon of Haifa, Israel, Ran Armon of Thornhill, Ontario, Canada, and Avnon's entity G Six Trading Y.R Ltd. with fraud and broker-dealer registration violations in connection with their roles in the scheme. The SEC's original complaint, filed on December 21, 2016, charged Naris Chamroonrat of Bangkok, Thailand, and Adam L. Plumer of Las Vegas, Nevada, in connection with the scheme. The SEC alleges that the defendants pocketed more than $1.4 million in deposits from hundreds of defrauded investors worldwide.
The SEC's amended complaint alleges that Armon, Avnon, and G6, together with the previously charged defendants Chamroonrat and Plumer, lured investors to day-trade through Nonko Trading, an unregistered brokerage firm, with promises of generous leverage, low trading commissions, and low minimum deposit requirements. According to the SEC's complaint, rather than using a live securities trading platform, Nonko Trading provided certain investors with training accounts that merely simulated the placement and execution of trade orders. So when these investors sent funds to Nonko Trading and proceeded to place trade orders, the orders were never actually routed to the markets. The SEC alleges that investor money was instead used to fund defendants' personal expenses, pay associates, and make Ponzi-like payments to investors who asked to close their accounts.
According to the SEC's complaint, the scheme deliberately targeted investors who were inexperienced and more likely to place unprofitable trades, making them less likely to ask to withdraw funds from their accounts.
In a parallel action, the U.S. Attorney's Office for the District of New Jersey announced criminal charges against Avnon and Armon. In May 2017, Chamroonrat entered a guilty plea in the parallel criminal case.
The SEC's amended complaint charges Avnon, Armon, and G Six, as well as the previously charged defendants Chamroonrat and Plumer, with violating Section 17(a) of the Securities Act of 1933 and Sections 10(b), 15(a)(1) and 20(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The SEC is seeking injunctions and the disgorgement of ill-gotten gains plus interest and penalties.
The SEC's continuing investigation is being conducted by Simona K. Suh, Barry P. O'Connell, and John D. Marino of the Market Abuse Unit and Elzbieta Wraga of the New York Regional Office. The case has been supervised by Joseph G. Sansone, Co-Chief of the SEC's Market Abuse Unit. The SEC's litigation will be led by Ms. Suh and Mr. O'Connell. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of New Jersey, Federal Bureau of Investigation, Financial Industry Regulatory Authority, Australian Securities and Investments Commission, Securities Commission of The Bahamas, Financial Supervisory Commission of the Cook Islands, Israel Securities Authority, Financial Services Commission's Nevis Branch, Ontario Securities Commission, Monetary Authority of Singapore, and Securities and Exchange Commission of Thailand.