The Securities and Exchange Commission announced today that it filed charges against self-described software engineer Derek J. Slattery and his company, TradeSmart Software RIC Corporation, for allegedly conducting an offering fraud involving the purported trading of Apple, Inc. stock options.

The SEC's complaint alleges that between October 2018 and March 2020, Slattery and TradeSmart raised as much as $1.8 million from as many as 300 investors in the United States, Europe, Asia, and Australia through a fraudulent offering of securities in the form of "redeemable units" purportedly in a "fixed portfolio" consisting solely of Apple, Inc. stock options. The complaint alleges that Slattery falsely claimed that TradeSmart used specialized, proprietary software that he created to trade Apple options and generate guaranteed annual returns of 30% or more. As alleged in the complaint, Slattery and TradeSmart enticed investors by promising that investor proceeds would be used to trade Apple options. According to the complaint, however, no trading occurred in Apple options or any other securities on behalf of investors. Contrary to his representations, Slattery allegedly misappropriated investor funds and used them to pay living expenses, to pursue other "business" activities, and to make intermittent Ponzi-like payments to investors requesting withdrawals from their accounts.

The SEC's complaint, filed in federal district court in Las Vegas, Nevada, charges Slattery and TradeSmart with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(a) and (c) thereunder. The SEC seeks permanent injunctions against Slattery and TradeSmart, disgorgement along with prejudgment interest, and civil penalties.

The SEC's investigation was conducted by Solomon R. Mangolini and Lorraine Pearson, and supervised by Ansu N. Banerjee. The litigation will be led by Lynn Dean, and supervised by Jennifer Barry.