SEC Obtains Summary Judgment in EDGAR Manipulation Case
Litigation Release No. 24086 / March 28, 2018
Securities and Exchange Commission v. Nauman A. Aly, No. 1:16-cv-03853 (S.D.N.Y. filed May 24, 2016)
The Securities and Exchange Commission announced that on March 27, 2018, Judge Paul G. Gardephe of the United States District Court for the Southern District of New York granted the SEC's motion for summary judgment against Nauman Aly, a trader in Pakistan who, according to the SEC's complaint, made $425,000 manipulating the price of Integrated Device Technology (IDT) securities by filing a false tender offer on the SEC's EDGAR system.
The court ruled that the SEC was entitled to summary judgment on its fraud claims against Aly. The court held that (1) Aly made the statement at issue by signing the EDGAR filings; (2) the EDGAR filing contained multiple false and misleading statements that were material; (3) the conduct also constituted a fraudulent scheme; and (4) undisputed facts demonstrated that Aly acted with scienter. The court also ruled that Aly had provided no corroborating evidence to support his outlandish story explaining his conduct. The court also denied Aly's cross-motion for summary judgment and his motion to strike the report of the SEC's expert.
The SEC's investigation was conducted by David W. Snyder, Assunta Vivolo, and Patrick A. McCluskey under the supervision of Kelly L. Gibson, Associate Director of the Philadelphia Regional Office, Robert A. Cohen, Chief of the Cyber Unit, and Joseph G. Sansone, Chief of the Market Abuse Unit. Julia C. Green is leading the SEC's litigation under the supervision of Jennifer C. Barry.