Court Enters Judgment against Former Owner of a Massachusetts-Based Trading Company in SEC Enforcement Action
Litigation Release No. 24039 / February 2, 2018
Securities and Exchange Commission v. Boston Trading and Research, LLC, et al., Civil Action No. 1:10-cv-11841 (D. Mass. October 28, 2010)
The Securities and Exchange Commission announced today that on December 12, 2017, the U.S. District Court for the District of Massachusetts entered a final judgment against Craig Karlis, a former owner of the now-defunct, Massachusetts-based Boston Trading and Research, LLC ("BTR"), in a case involving a fraudulent foreign currency trading enterprise.
On October 28, 2010, the Commission filed a civil injunctive action in federal court in Massachusetts against BTR and its principals, Ahmet Devrim Akyil and Craig Karlis, alleging that they fraudulently raised millions of dollars from hundreds of investors in a foreign currency ("Forex") trading venture. Among other things, the Commission alleged that the defendants misappropriated some investor funds for business and personal expenses and lost the vast majority of remaining investor funds through Forex trading activity after falsely promising investors that most of their funds would be protected from such trading losses. BTR also provided investors with misleading account statements that did not accurately reflect the firm's trading activity.
After filing, the case was stayed pending the disposition of related criminal prosecutions of Akyil and Karlis brought by the Massachusetts U.S. Attorney. Karlis pleaded guilty in March 2014 to nine counts of wire fraud, among other charges. In September 2014, Karlis was sentenced to nine years in prison, three years of supervised release, and ordered to pay $4,378,356 in restitution to the fraud victims.
In the SEC's action, Karlis, formerly of Hopkinton, Massachusetts, consented to the entry of the final judgment, which permanently enjoins him from violating Sections 10(b) and 15(a)(1) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933. The judgment also orders Karlis to pay $1,641,067.76 in disgorgement and $549,376.92 in prejudgment interest, for a total of $2,190,444.68, which was deemed satisfied by the restitution order in the related criminal proceedings.
On February 2, 2018, the Commission also issued an order instituting settled administrative proceedings against Karlis. The order, to which Karlis consented without admitting or denying the SEC's findings, permanently bars Karlis from associating with any broker or dealer pursuant to Section 15(b)(6) of the Exchange Act.
The Commission's case against Akyil is ongoing.