Fyi...this may explain those "cap election" or "out of sequence" trades. (Swops)
SEC Charges Unregistered Brokers That Facilitated More Than $1.2 Billion in Primarily Penny Stock Trades
FOR IMMEDIATE RELEASE
2022-207
Washington D.C., Nov. 17, 2022 —
The Securities and Exchange Commission today charged Jeffrey K. Galvani, Stuart A. Jeffery, and two New York-based entities they controlled with operating as unregistered broker-dealers that facilitated more than $1.2 billion of securities trading, primarily in penny stocks.
The SEC’s complaint alleges that Galvani and Jeffery – both registered brokers at a registered broker-dealer unconnected with this case – created GEL Direct Trust, which they managed through its trustee, GEL Direct, LLC. The GEL entities were not registered with the SEC as broker-dealers. Nonetheless, from 2019 through at least May 2022, Galvani and Jeffery, acting through the GEL entities, provided brokerage services to approximately 60 customers involving at least 19,000 securities trades, primarily in penny stocks. The brokerage services they allegedly provided included taking possession of customer securities, directing trades to executing brokers , facilitating trade settlements , and disbursing trading proceeds to customers. In return for these services, the defendants allegedly received at least $12 million in transaction-based and other compensation.
“Broker-dealer registration protects investors and our markets. It is not optional,” said David L. Peavler, Director of the SEC’s Fort Worth Regional Office. “As securities industry professionals, Galvani and Jeffery knew the rules, but we allege they didn’t follow them.”
The SEC’s complaint, filed in U.S. District Court for the Southern District of New York, charges Galvani, Jeffery, GEL Direct Trust, and GEL Direct, LLC with violating the broker-dealer registration requirement of Section 15(a) of the Securities Exchange Act of 1934 and charges Galvani and Jeffery as “control persons” of the GEL entities under Section 20(a) of the Exchange Act. The SEC seeks permanent injunctions, disgorgement, prejudgment interest, civil penalties, and penny stock bars against all defendants.
The SEC’s investigation was conducted by Derek Kleinmann and Carol Stumbaugh. It was supervised by Sarah S. Mallett, Barbara L. Gunn, and Eric R. Werner of the Fort Worth Regional Office. The SEC’s litigation is being conducted by Keefe Bernstein and supervised by B. David Fraser.
The staff acknowledges the assistance and cooperation of the Financial Industry Regulatory Authority (FINRA) in this investigation.
https://www.sec.gov/news/press-release/2022-207
$13
$CRGP
SEC Charges Unregistered Brokers That Facilitated More Than $1.2 Billion in Primarily Penny Stock Trades
FOR IMMEDIATE RELEASE
2022-207
Washington D.C., Nov. 17, 2022 —
The Securities and Exchange Commission today charged Jeffrey K. Galvani, Stuart A. Jeffery, and two New York-based entities they controlled with operating as unregistered broker-dealers that facilitated more than $1.2 billion of securities trading, primarily in penny stocks.
The SEC’s complaint alleges that Galvani and Jeffery – both registered brokers at a registered broker-dealer unconnected with this case – created GEL Direct Trust, which they managed through its trustee, GEL Direct, LLC. The GEL entities were not registered with the SEC as broker-dealers. Nonetheless, from 2019 through at least May 2022, Galvani and Jeffery, acting through the GEL entities, provided brokerage services to approximately 60 customers involving at least 19,000 securities trades, primarily in penny stocks. The brokerage services they allegedly provided included taking possession of customer securities, directing trades to executing brokers , facilitating trade settlements , and disbursing trading proceeds to customers. In return for these services, the defendants allegedly received at least $12 million in transaction-based and other compensation.
“Broker-dealer registration protects investors and our markets. It is not optional,” said David L. Peavler, Director of the SEC’s Fort Worth Regional Office. “As securities industry professionals, Galvani and Jeffery knew the rules, but we allege they didn’t follow them.”
The SEC’s complaint, filed in U.S. District Court for the Southern District of New York, charges Galvani, Jeffery, GEL Direct Trust, and GEL Direct, LLC with violating the broker-dealer registration requirement of Section 15(a) of the Securities Exchange Act of 1934 and charges Galvani and Jeffery as “control persons” of the GEL entities under Section 20(a) of the Exchange Act. The SEC seeks permanent injunctions, disgorgement, prejudgment interest, civil penalties, and penny stock bars against all defendants.
The SEC’s investigation was conducted by Derek Kleinmann and Carol Stumbaugh. It was supervised by Sarah S. Mallett, Barbara L. Gunn, and Eric R. Werner of the Fort Worth Regional Office. The SEC’s litigation is being conducted by Keefe Bernstein and supervised by B. David Fraser.
The staff acknowledges the assistance and cooperation of the Financial Industry Regulatory Authority (FINRA) in this investigation.
https://www.sec.gov/news/press-release/2022-207
$13
$CRGP
2
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U.S. Constitution
"The Preamble
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
Oath
"I solemnly swear to support and defend the Constitution of the United States of America"
The Flag
"I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all."
"The Preamble
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
Oath
"I solemnly swear to support and defend the Constitution of the United States of America"
The Flag
"I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all."
Quote:If the broker-dealer fails to deliver for 13 days, the regulation imposes a “close out” duty to purchase and deliver securities “of like kind and quantity.”
https://www.bloomberg.com/opinion/articles/20...ify%20wall
https://www.scotusblog.com/case-files/cases/m...v-manning/
