SEC Charges Four Individuals in Unauthorized Trading Scheme
Litigation Release No. 24788 /April 3, 2020
Securities and Exchange Commission v. Engler, et al., No. 20-cv-1625 (E.D.N.Y.) (filed March 31, 2020)
On March 31, 2020, the Securities and Exchange Commission filed a complaint against four individuals for conducting a fraudulent unauthorized trading scheme through retail customer accounts at their Commission-registered brokerage firm.
According to the SEC's complaint, Jonah Engler of New York, Joshua W. Turney of California, Hector Perez of New Jersey, and Barbara Desiderio of New Jersey engaged in a scheme to conduct voluminous unauthorized trading in over 360 retail customer accounts as Global Arena Capital Corp., the New York broker dealer they were associated with at the time, was going out of business. This unauthorized trading allegedly generated over $2.4 million in unlawful markups, markdowns, and commissions for their firm and resulted in over $4 million in net losses for their customers. The complaint alleges that Engler, who indirectly owned and controlled Global, orchestrated the scheme, and Turney and Perez, who were registered representatives at Global, carried it out with the assistance of Desiderio, Global's President, CCO and supervisor.
The SEC's complaint, filed in federal district court in Brooklyn, charges Engler, Turney and Perez with violating the antifraud provisions of Section 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(a) and (c) thereunder, and charges Desiderio with aiding and abetting Engler's, Turney's and Perez's violations. The SEC's complaint further seeks disgorgement of ill-gotten gains plus prejudgment interest, penalties, and injunctive relief.
The SEC's investigation was conducted by Hane L. Kim, Margaret Spillane, Jacqueline Fine, Sandra Yanez, and Steven G. Rawlings, and supervised by Lara S. Mehraban. The SEC's litigation will be led by Richard Primoff, Ms. Kim and Ms. Spillane. The SEC thanks the Financial Industry Regulatory Authority (FINRA) for their assistance in this matter. The SEC's investigation is continuing.