SEC charges former broker with putting customers in unsuitable, risky investments – InvestmentNews


SEC charges former broker with putting customers in unsuitable, risky investments
The Securities and Exchange Commission charged a former broker Tuesday with trading leveraged ETFs and ETNs in customers’ accounts and misappropriating $170,000 from one of his customers. The SEC says that Demitrios Hall traded 179 daily …
SEC: Broker Charged With Defrauding CustomersExchange News Direct

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April 26, 2017 at 05:13AM


Broker Charged With Defrauding Customers

The Securities and Exchange Commission today charged a former broker with knowingly or recklessly trading unsuitable investment products in the accounts of five customers and misappropriating more than $170,000 from one of those customers.

The SEC’s complaint alleges that Demitrios Hallas repeatedly traded unsuitable investments in his customers’ accounts, exposing customers who were unsophisticated with limited or no investing experience and modest incomes, net worth levels, and assets to a significant degree of volatility and risk.  In a little more than a year, Hallas allegedly traded 179 daily leveraged exchange traded funds (ETFs) and exchange traded notes (ETNs) – products that the SEC alleges are inherently risky, complex and volatile, and only appropriate for sophisticated investors – in the customers’ accounts, generating commissions and fees of approximately $128,000.  The net loss across all 179 positions was approximately $150,000.  The SEC’s complaint further alleges that Hallas misappropriated more than $170,000 in funds from one customer.  Instead of investing the funds on the customer’s behalf, Hallas allegedly deposited the funds into his own personal bank accounts and spent them on personal expenses, including significant bar and restaurant bills, credit card and student loan payments, and rent.

The SEC previously issued an Investor Alert warning about excessive trading and churning that can occur in brokerage accounts, and an Investor Bulletin educating investors about ETNs and the risks associated with them.

“As alleged in our complaint, Hallas enriched himself by systematically disregarding his customers’ investment profiles and repeatedly trading in risky, volatile products that were unsuitable for them,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office and Co-Chair of the Enforcement Division’s Broker Dealer Task Force.  “As reflected in this case and our recent case against two former JD Nicholas brokers, the SEC is very focused on brokers who seek to exploit their customers by willfully recommending unsuitable trades or strategies to them.”

The SEC’s complaint charges Hallas with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.  The complaint seeks a permanent injunction as well as the return of ill-gotten gains plus interest and penalties.

The SEC’s investigation was conducted by Michael C. Ellis and Thomas P. Smith Jr. in the New York office.  The litigation will be led by David Stoelting and Mr. Ellis, and the case is being supervised by Sanjay Wadhwa.  The examination that led to the investigation was conducted by Ronald Krietzman, John Celio, Dee-Ann DiSalvo, and Bernard Bujak.

April 26, 2017 at 02:03AM


SEC Awards Nearly $4 Million to Whistleblower

The Securities and Exchange Commission today announced an award of nearly $4 million to a whistleblower who tipped the agency with detailed and specific information about serious misconduct and provided additional assistance during the ensuing investigation, including industry-specific knowledge and expertise.

“Not only did this whistleblower step forward and report suspicious conduct, but continued to help after we opened our investigation,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.  “Whistleblowers with specialized experience or expertise can help us expend fewer resources in our investigations and bring enforcement actions more efficiently.”

Approximately $153 million has now been awarded to 43 whistleblowers who became eligible for an award after voluntarily providing the SEC with original and useful information that led to successful enforcement actions. 

SEC enforcement actions from whistleblower tips have resulted in more than $953 million in financial remedies against wrongdoers.

By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.  Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.  All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators.  No money has been taken or withheld from harmed investors to pay whistleblower awards.

For more information about the whistleblower program and how to report a tip, visit

April 26, 2017 at 12:02AM


SEC to Review Last Month’s Bitcoin Ruling –

SEC to Review Last Month’s Bitcoin Ruling
The Securities and Exchange Commission intends to review last month’s ruling that denied Bitcoin, a digital currency, to list as the first U.S. exchange-traded fund built to track the currency, Reuters reports. Bitcoin traded higher by 1.7% to $1275.14
US regulators to review decision denying Bitcoin ETF – filingChannel NewsAsia

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April 25, 2017 at 11:20PM


Securities and Exchange Commission to Host First Twitter Chat on Investing (Wisely) – Crowdfund Insider

Securities and Exchange Commission to Host First Twitter Chat on Investing (Wisely)
Crowdfund Insider
The Securities and Exchange Commission (SEC) will hold its first “Twitter Chat” on investing wisely. According to the SEC, the outreach is part of Money Smart Week and Financial Literacy Month. The Offices of Public Affairs and Investor Education and …

April 25, 2017 at 09:51PM


Exclusive: ITG’s Selway eyed to run markets division at US SEC – sources – Reuters


Exclusive: ITG’s Selway eyed to run markets division at US SEC – sources
N), is a front runner to head the Trading and Markets division at the U.S. Securities and Exchange Commission, according to three sources familiar with the matter. Selway declined to comment and it is not clear when a final decision or announcement

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April 25, 2017 at 09:51PM


Trump Pick for SEC Chairman Assembling Top Agency Staff – Wall Street Journal (subscription)

Trump Pick for SEC Chairman Assembling Top Agency Staff
Wall Street Journal (subscription)
WASHINGTON—President Donald Trump’s choice to run the Securities and Exchange Commission is quietly assembling a cabinet of top staff members who spent their careers on Wall Street or advised companies on big deals, foreshadowing the …

April 25, 2017 at 08:22PM