It鈥檚 a $14.5 million payout for brothers Wolfson
19 July 2012 New York
Image: Shutterstock
Brothers Jeffrey and Robert Wolfson, accused of naked short selling by the SEC, agreed to pay $14.5 million to settle the case against them.
The investigation found that the pair of options traders failed to locate shares involved in short sales, and failed to close out the resulting failures to deliver.
鈥淭he Wolfsons attempted to game short-selling restrictions in order to win millions of dollars in illegal profits. This settlement deprives them of those profits and more,鈥� said Andrew Calamari, acting director of the SEC鈥檚 New York regional office.
The Wolfsons made approximately $9.5 million in illegal profits from their naked short selling transactions, it is alleged. Reports from the SEC confirmed that Jeffrey Wolfson, 59, conducted naked short sales while working as a broker-dealer, and later as the principal trader at a Chicago-based brokerage firm no longer in business.
Robert Wolfson, 57, made the illegal sales while trading in an account at New York-based broker-dealer Golden Anchor Trading II LLC, which also was charged by the SEC and agreed to the settlement. Jeffrey Wolfson generated approximately $8.8 million in net illicit trading profits, and Robert Wolfson and Golden Anchor made $700,000.
Jeffrey Wolfson is required to pay $13.4 million, which includes a $2.5 million penalty in addition to disgorgement of illegally obtained gains and prejudgment interest. Robert Wolfson and Golden Anchor are required to collectively pay $1.1 million, and settled the SEC鈥檚 administrative proceedings without admitting or denying the findings.
Jeffrey Wolfson is also suspended from working in the securities industry for 12 months, and Robert Wolfson is suspended for four months. Golden Anchor has been censured, and along with the Wolfsons is subject to a cease and desist order from committing or causing violations of the short sale rules they violated.
The investigation found that the pair of options traders failed to locate shares involved in short sales, and failed to close out the resulting failures to deliver.
鈥淭he Wolfsons attempted to game short-selling restrictions in order to win millions of dollars in illegal profits. This settlement deprives them of those profits and more,鈥� said Andrew Calamari, acting director of the SEC鈥檚 New York regional office.
The Wolfsons made approximately $9.5 million in illegal profits from their naked short selling transactions, it is alleged. Reports from the SEC confirmed that Jeffrey Wolfson, 59, conducted naked short sales while working as a broker-dealer, and later as the principal trader at a Chicago-based brokerage firm no longer in business.
Robert Wolfson, 57, made the illegal sales while trading in an account at New York-based broker-dealer Golden Anchor Trading II LLC, which also was charged by the SEC and agreed to the settlement. Jeffrey Wolfson generated approximately $8.8 million in net illicit trading profits, and Robert Wolfson and Golden Anchor made $700,000.
Jeffrey Wolfson is required to pay $13.4 million, which includes a $2.5 million penalty in addition to disgorgement of illegally obtained gains and prejudgment interest. Robert Wolfson and Golden Anchor are required to collectively pay $1.1 million, and settled the SEC鈥檚 administrative proceedings without admitting or denying the findings.
Jeffrey Wolfson is also suspended from working in the securities industry for 12 months, and Robert Wolfson is suspended for four months. Golden Anchor has been censured, and along with the Wolfsons is subject to a cease and desist order from committing or causing violations of the short sale rules they violated.
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