SEC Charges Trader and Friend for Manipulative Trading Scheme

ADMINISTRATIVE PROCEEDING
File No. 3-19188; 3-19189

June 3, 2019 - The Securities and Exchange Commission today announced charges against Anthony Savino, a full-time day trader based in Staten Island, New York, for carrying out a manipulative trading scheme. The SEC also announced charges against Savino's friend Joseph Palermo, also of Staten Island, New York, who contributed to the trading scheme by funding Savino's trading and allowing Savino to trade in his brokerage account in exchange for a share of the profits.

The SEC found that Savino orchestrated a manipulative trading scheme by using Palermo's account to place multiple buy orders for a security, at multiple trading venues and multiple price levels, at and above prevailing market prices, for the purpose of creating the false appearance of buy interest at those price levels. The order activity caused the price of the security to rise and, as found by the SEC, enabled Savino to sell the same security at artificially inflated prices. The SEC also found that Savino and Palermo did not disclose Savino's involvement with the account to the brokerage firm where the account was held, but instead provided misleading information about the identity of the trader, including in response to the firm's inquiry about potentially manipulative trading in the account.

The SEC order finds that Savino violated the antifraud provisions of Sections 17(a)(1) and 17(a)(3) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5(a) and 10b-5(c) thereunder, and the manipulative trading provision of Section 9(a)(2) of the Exchange Act. Without admitting or denying the SEC's findings, Savino agreed to settle the charges by consenting to a cease-and-desist order, disgorgement of $187,200, prejudgment interest of $20,144, a civil money penalty of $50,000, and an associational bar with the right to reapply after three years.

In a separate order, the SEC found that Palermo caused Savino's violations of Section 17(a)(3) of the Securities Act. Without admitting or denying the SEC's findings, Palermo agreed to settle the charges by consenting to a cease-and-desist order, as well as disgorgement of $128,150 and prejudgment interest of $22,860. In deciding to forego a penalty against Palermo, the Commission took into account that Palermo was previously fined $50,000 in a related matter by the Financial Industry Regulatory Authority ("FINRA").

The SEC's investigation was conducted by Joshua R. Geller, Melanie A. MacLean, John D. Marino, and Simona K. Suh and supervised by Joseph G. Sansone of the SEC's Market Abuse Unit, and assisted by Neil Hendelman and Richard Hong of the SEC's New York office. The SEC appreciates the assistance of FINRA.