South Florida Arbitration & Litigation Lawyer Blog
July, 2012:
In the Matter of Jeffrey A. Wolfson, Robert A. Wolfson and Golden Anchor Trading II, LLC (n/k/a Barabino Trading, LLC)
Recently, the Commission issued orders making findings and imposing remedial sanctions and cease-and-desist orders as part of settlements with two options traders and a broker-dealer who have agreed to pay more than $14.5 million to settle charges brought by the Commission in an administrative proceeding in January 2012 that they engaged in naked short selling by failing to locate shares involved in short sales and by failing to close out the resulting failures to deliver.
According to the SEC’s Orders, filed today, Jeffrey A. Wolfson generated approximately $8.8 million and Robert A. Wolfson and Golden Anchor Trading II, LLC (Golden Anchor) generated over $700,000, in net illicit trading profits from naked short selling transactions. The SEC’s Orders find that Jeffrey Wolfson engaged in illegal naked short sales while working as a broker-dealer himself and later as the principal trader at a Chicago-based broker-dealer that is no longer in business. Robert Wolfson, Jeffrey’s brother, conducted illegal naked short sales while trading through an account at New York-based broker-dealer Golden Anchor, which also was charged by the SEC and agreed to the settlement.
The Wolfsons and Golden Anchor settled the SEC’s administrative proceedings without admitting or denying the SEC’s findings. The Commission’s Order with respect to Jeffrey Wolfson requires him to pay $13.425 million, which includes a $2.5 million civil penalty in addition to disgorgement and prejudgment interest. The Commission’s Order with respect to Robert Wolfson and Golden Anchor orders them to pay, on a joint and several basis, $1.1 million in disgorgement, prejudgment interest and civil penalties. All of the respondents are also subject to a cease-and-desist order from committing or causing violations of the short sale rules they have been found to have violated. In addition, Jeffrey Wolfson has been suspended from working in the industry for a period of twelve months, and Robert Wolfson has been suspended for a period of four months. Golden Anchor has been censured. (Rel. 34-67450 and 34-67451; File No. 3-14726; Press Rel. 2012-137)