SEC Obtains Judgments against Operators Of Closed Broker Dealer

The US Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission today said it has obtained partial consent judgments against four individuals for allegedly operating a fraudulent trading scheme.

The complaint alleges defendants Jonah Engler, Joshua Turney, Hector Perez, and Barbara Desiderio executed thousands of unauthorized trades in their customer accounts generating unfair commissions for a broker-dealer they owned and massive losses for their customers.

The alleged scheme began in 2015 and was led by Jonah Engler who indirectly owned and controlled now defunct New York-based broker Global Arena Capital Corp. The regulator said when Engler knew that Arena would be forced to shut down, he instructed the other defendants to use misleading sales pitches, churning accounts and committing various other abuses.

The SEC identified a group of three brokers who were barred from the brokerage industry for engaging in unauthorized trading in non-discretionary client accounts to generate high commission revenue.

This also included recommending frequent trades at rates significantly higher than those charged by other brokers and the use of high-pressure sales tactics involving junk bonds and other securities.

Global Arena typically charged nearly 8 percent per a single security transaction as it imposed a 3.9% markup or markdown per trade. These fraudulent trades yielded over $2.4 million in commission revenue for the company and incurred customer losses of over $4 million as a result.

Turney and Perez, two former branch managers who were principals at the firm, were also barred from ever acting in any principal capacity. They allegedly made fake phone calls to their customers, left them long silent voicemails or left their phone on mute in order to make it appear as if the trades had the required client approval.

The agency said this was a discernable attempt by defendants to cover up their knowingly fraudulent unauthorized trades.

Global Arena Capital, which cleared through RBC Capital Markets, had been a FINRA member broker-dealer since 1986. However, the New York-headquartered company withdrew its Finra registration after the Wall Street’s self-regulator sanctioned 10 of its executives, as well as for failing to pay about $50,000 in fees.