U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25693 / April 17, 2023
Securities and Exchange Commission v. Engler, et al., No. 1:20-cv-01625 (E.D.N.Y. filed Mar. 31, 2020)
SEC Obtains More Than $5 Million in Final Judgments Against Two Defendants in IIIicit Trading Scheme
On April 12, 2023, the U.S. District Court for the Eastern District of New York entered final judgments against defendants Jonah Engler and Barbara Desiderio in an ongoing civil action in which the SEC alleges that Engler, Desiderio and two other defendants conducted a fraudulent, unauthorized trading scheme through hundreds of retail customer accounts at New York broker-dealer Global Arena Capital Corp. Engler, who allegedly controlled Global Arena and directed the scheme, was ordered to disgorge $1,440,683.51 in ill-gotten gains plus prejudgment interest of $420,561.71, and to pay a civil penalty of $2,295,977.90. Desiderio was ordered to pay $391,000 in disgorgement, $114,140 in prejudgment interest, and a civil penalty of $391,000.
The SEC’s complaint, filed on March 31, 2020 against Engler, Desiderio, Joshua Turney, and Hector Perez, alleged that the defendants engaged in illicit trading in over 360 retail customer accounts as Global Arena was going out of business, which resulted in over $4 million in net losses for their customers and generated over $2.4 million in unlawful markups, markdowns, and commissions for their firm. The SEC’s complaint charged Engler with violating the antifraud provisions of Section 17(a)(1) and (3) 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, and charged Desiderio with aiding and abetting her co-defendants’ violations.
The Court previously entered partial consent judgments against Engler and Desiderio, permanently enjoining them from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Based on the entry of those judgments, the SEC also previously issued orders barring Engler and Desiderio from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, and from participating in any offering of a penny stock. For further information, see Litigation Releases No. 24874 (Aug. 25, 2020) and No. 25221 (Sept. 24, 2021).
The SEC’s litigation, which continues as to Turney and Perez, is led by Richard Primoff, Margaret Spillane, Jacqueline Fine, Hane L. Kim, and Steven G. Rawlings, and is supervised by Sheldon Pollock of the New York Regional Office.