Albert J. Scipione
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23136 / November 19, 2014
Securities and Exchange Commission v. Albert J. Scipione, Civil Action No. 8:14cv2886t33TGW
SEC Charges Unregistered Broker in Tampa Area with Stealing from Investors in Fraudulent Day Trading Scheme
On November 18, 2014, the Securities and Exchange Commission charged an unregistered broker living outside Tampa, Fla., with stealing investor funds as part of a fraudulent day trading scheme.
The SEC alleges that Albert J. Scipione and his business partner solicited investors to establish accounts at their company called Traders Caf© for the purposes of day trading, which entails the rapid buying and selling of stocks throughout the day in hope that the stock values continue climbing or falling for the seconds to minutes they own them so they can lock in quick profits. Scipione touted Traders Caf©'s software trading platform and made a series of false misrepresentations to investors about low commissions and fees, high trading leverage, and safety of their assets. More than $500,000 was raised from investors who were assured that funds invested with Traders Caf© would be segregated and used only for day trading or other specific business purposes. However, many customers encountered technical service problems that prevented them from trading at all, and Scipione and his business partner squandered nearly all of the money in investor accounts for their personal use. Meanwhile, Traders Caf© was never registered with the SEC as a broker-dealer as required under the federal securities laws.
The SEC previously charged Scipione's business partner Matthew P. Ionno, who agreed to settle the case and has been barred from the securities industry. Financial penalties will be decided by the court at a later date.
In a parallel action, the U.S. Attorney's Office for the Middle District of Florida has announced that Scipione has pleaded guilty to criminal charges. The U.S. Attorney's Office previously brought a criminal case against Ionno.
According to the SEC's complaint filed against Scipione in federal court in Tampa, customers across the country deposited approximately $367,000 with Traders Caf© from December 2012 to October 2013 with the intention of opening day trading accounts. Traders Caf© also received approximately $150,000 from an investor who invested directly in Traders Caf©'s business. Customers encountered problems with Traders Caf© from the outset, and many of them cancelled their accounts and requested refunds of their remaining account balances. Scipione and Ionno tried to cover up their fraudulent scheme by offering excuses and delays for why customers could not get refunds. Eventually less than $1,200 remained in Traders Caf©'s accounts primarily due to the repeated misuse of investor funds by Scipione and Ionno.
The SEC's complaint against Scipione alleges that he violated Section 17(a) of the Securities Act of 1933 as well as Section 15(a) and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The SEC seeks disgorgement of ill-gotten gains, financial penalties, and permanent injunctive relief to enjoin Scipione from future violations of the federal securities laws.
The SEC's investigation was conducted by D. Corey Lawson and Tonya T. Tullis, and the SEC's litigation is being led by Christopher E. Martin. The SEC appreciates the assistance of the U.S. Attorney's Office for the Middle District of Florida, the Federal Bureau of Investigation, and the Florida Office of Financial Regulation.
