SEC Concludes Unauthorized Trading Case: Former Broker-Dealers Ordered to Pay Over $5 Million in Restitution

The Securities and Exchange Commission has settled a case of illicit trading against two former registered agents. This settlement demonstrates the SEC’s relentless pursuit of justice. The U.S. District Court of the Eastern District of New York handed down final judgments on May 18, 2023 against Joshua W. Turney, Hector Perez and Global Arena Capital Corp., former New York broker-dealer.

The Allegations

Turney, Perez and the SEC were accused of a fraudulent scheme. This was similar to a puppeteer manipulating his marionettes with their consent. This involved massive trading of Global Arena customer accounts all without the consent of customers. Between April and June 2015, defendants used 360 customer accounts for their own personal enjoyment, generating over $2.4 million of illegal profits for Global Arena as well as ill-gotten gain for them. What was the result? The fallout?

The Charges & Sentences

Turney and Perez not only were charged by SEC but also criminally, by the U.S. Attorney’s Office of Eastern District of New York. Imagine the weight of these charges. Both pleaded to guilty to one count, conspiracy to commit securities fraudulent. Turney was sentenced for two years in prison, followed by a period of two years supervised release. Perez was given a probationary period of two years. Not only that. The defendants were ordered to pay $5,295,868.12 as restitution jointly and severally and forfeit their gains.

The final judgments

Turney, Perez and the SEC agreed to separate final judgements for the SEC lawsuit in the face of overwhelming evidence. Turney had to pay disgorgement in the amount of $347 019.13, as well as prejudgment interest totaling $81,297.47. Perez on the other had to pay $137.275.26 in disgorgement and $32,159.94 in prejudgment interest. The restitution orders and forfeiture orders from their parallel criminal proceedings were considered sufficient to satisfy these payments.

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SEC Action and Assistance

Turney and Perez had previously been subject to partial consent judgments, which permanently prohibited them from violating antifraud provisions of the Securities Act and Exchange Act. Recently, the SEC concluded its litigation with two other defendants: Jonah Engler & Barbara Desiderio. Richard Primoff, Margaret Spillane Jacqueline Fine Hane L.Kim, Steven G. Rawlings, Sandra Yanez, from the New York Regional Office as well as Margaret Spillane and Jacqueline Fine were all part of SEC’s litigation teams and investigations. Sheldon Pollock, of the New York Regional Office, supervised the litigation. The SEC expressed its appreciation to the U.S. Attorney’s Office of the Eastern District of New York as well as the Federal Bureau of Investigation and the Financial Industry Regulatory Authority for their assistance in this matter.

This case shows that the SEC is committed to protecting investors against fraudulent schemes. This case is a reminder that illicit acts can have severe consequences in the world of finance.

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