SEC brings fraud charges against trader for “free riding”

Maria Nikolova

Vu Anh Nguyen allegedly orchestrated a scheme to trade securities without sufficient funds, a practice known as “free riding”.

The United States Securities and Exchange Commission (SEC) has brought fraud charges against Arizona resident Vu Anh Nguyen for orchestrating a scheme to trade securities without sufficient funds, a practice known as “free riding”.

The illicit scheme is estimated to have caused over $1 million in total losses for eight brokerage firms. The SEC also charged Arizona residents Adam Michael Reed and Anthony Xavier Moya with aiding and abetting the scheme.

According to the SEC’s complaint, in 2018 and 2019, Nguyen opened brokerage accounts and requested electronic fund transfers from bank accounts, knowing that the accounts had insufficient funds to cover the transfers. The complaint also alleges that Nguyen immediately began trading securities in the accounts.

Nguyen was able to transfer $61,888 out of the accounts before the accounts were frozen by the brokerage firms, reaping the benefits of profits earned due to trading, while leaving the brokerage firms to settle the trades at a significant loss.

The complaint further alleges that Reed and Moya provided Nguyen access to brokerage accounts they opened, knowing that Nguyen was going to use the accounts to further this fraudulent scheme. In total, Nguyen allegedly engaged in free-riding in 26 accounts at eight brokerage firms, making $4.7 million in bogus transfers and purchasing over $16 million in securities.

The SEC’s complaint charges Nguyen with violating, and Reed and Moya with aiding and abetting Nguyen’s violations of, the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks injunctions and civil penalties against all defendants and disgorgement with prejudgment interest against Nguyen and Reed.

Nguyen and Moya, without admitting or denying the allegations in the SEC’s complaint, consented to the entry of judgments enjoining them from future violations of the charged provisions and prohibiting them from opening brokerage accounts without first providing the broker-dealer with a copy of the complaint and judgment in this matter. Nguyen also agreed to be enjoined from trading in securities in any brokerage account that does not have settled cash to pay for the trade.

Read this next

Digital Assets

Centralized exchanges are 10 times more popular than DEXs in Western Europe

Western European traders are found to prefer centralized exchanges over decentralized ones as CEX traffic outpaces DEXs by a factor of ten.

Market News

Stock Market Analysis: Is NVDA Losing Its Leadership?

Since the beginning of the week, the S&P 500 Index (US500) has seen a modest increase of about 0.58%, whereas NVDA’s share price has experienced a decline of approximately 3.8%. This recent divergence raises concerns among Nvidia stock investors — could it signify a loss of NVDA’s market leadership?

Industry News

ESG: Australian regulator wins first greenwashing court case against Vanguard

Vanguard admitted that a notable portion of the securities within both the Index and the Fund did not undergo the promised ESG scrutiny.

Fintech, Uncategorized

BitMEX integrates HALO from Solidus Labs for cross-market surveillance

““The recent approval of the Spot Bitcoin ETF has piqued the market’s interest. As a result of price volatility, the trading volumes for crypto derivatives have gone up substantially. HALO, with its advanced technology and crypto-native detection architecture, will enable BitMEX to smoothly and safely scale trade surveillance across its increased trading volumes and provide the necessary safeguards for new product launches.”

Reviews

IUX Broker Review

IUX, recently rebranded from IUX Markets, stands as a multi-asset Forex broker recognized for its regulatory compliance across various jurisdictions.

Industry News

Horizon Software rebrands to Horizon Trading Solutions

“Horizon Trading Solutions has seen accelerated global growth over the past year to meet the rising demand for our trading solutions and built-for-purpose technology offering. The choice to rebrand represents a key part of this development, while maintaining our heritage and history in the industry.”

Market News

USDJPY has surged to levels last witnessed in 2022. Should we consider opening a short position?

The recent resurgence of the US dollar has propelled USD/JPY to new heights, touching levels not seen since 2022. This surge comes against the backdrop of stable short-term yields and ongoing economic data that fails to signal a significant slowdown, prompting questions about the extent of current monetary easing measures.

Digital Assets

DED Trends on Twitter After Memecoin Snapshot Announcement

Polkadot-backed community coin #DED, made it to the trending charts on X, demonstrating community’s engagement and interest behind the memecoin. 

Digital Assets

BlockDAG Presale Nears $10 Million Amid Toncoin’s Momentum, Green Bitcoin’s Presale, and the Rise of Other Top Cryptos

This article will examine three top trending topics: Toncoin’s potential, Green Bitcoin’s innovative presale, and BlockDAG’s sustainable mining approach. These cryptocurrencies take centre stage for their uniqueness and innovation.

<