Joshua David Nicholas, et al.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 25722 / May 12, 2023

Securities and Exchange Commission v. Joshua David Nicholas, et al., No. 22-cv-21995-CMA (S.D. Fla. filed June 30, 2022)

SEC Obtains Final Judgment Against Head Trader Charged in Fake Trading Scheme

The Securities and Exchange Commission has obtained a final judgment against a head trader at “EmpiresX,” which the agency charged with a fake trading scheme.

According to the SEC’s complaint, filed June 30, 2022, Joshua David Nicholas was the head trader of a purported hedge fund known as EmpiresX that was operated by co-defendants Emerson Sousa Pires and Flavio Mendes Goncalves. Since at least late 2020, EmpiresX sold investments touting daily profits of one percent earned by a trading “bot” or Nicholas’ manual trading. The complaint alleges that, in reality, the bot was fake, Nicholas’ trading resulted in significant losses, and the defendants only transferred a small portion of investors’ funds to EmpiresX’s brokerage account. Instead, the defendants allegedly misappropriated large sums of investors’ money to lease a Lamborghini, shop at Tiffany & Co., make a payment on a second home, and more.

Nicholas, Pires, and Goncalves were also charged criminally for their alleged conduct in a parallel criminal proceeding, United States v. Joshua David Nicholas, et al., 22-CR-20296-JEM (S.D. Fla.). Nicholas pled guilty and was sentenced to 51 months’ imprisonment, followed by three years of supervised release, and ordered to pay $3,379,527.18 in restitution. Pires and Goncalves are currently fugitives.

The final judgment against Nicholas, entered on April 19, 2022 by the U.S. District Court for the Southern District of Florida, enjoins Nicholas from violating Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

The SEC appreciates the assistance of the Department of Justice and the Commodity Futures Trading Commission.