Litigation Release No. 24947 / October 19, 2020
Securities and Exchange Commission v. Joseph P. Willner, No. 17-cv-06305 (E.D.N.Y. filed Oct. 30, 2017)
United States v. Joseph P. Willner, No. 17-cr-620 (E.D.N.Y. filed Nov. 8, 2017)
The SEC’s complaint, filed on October 30, 2017, alleged, among other things, that Willner took advantage of the artificially higher or lower stock prices that resulted from the unauthorized trades placed in the victims’ accounts by knowingly trading the same securities in his own accounts. The complaint further alleged that he disguised his real identity using a pseudonym while communicating with at least one other individual through online direct messaging applications. To mask his payments to the other individual as part of a profit-sharing arrangement, Willner allegedly transferred proceeds of profitable trades to a digital currency company that converts U.S. dollars to Bitcoin and then transmitted the bitcoins as payment.
The final consent judgment enjoins Willner from future violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the market manipulation provision of Section 9(a)(2) of the Exchange Act. The judgment also orders disgorgement and prejudgment interesting totaling $418,581, which was deemed satisfied by the orders of forfeiture and restitution entered against Willner in a parallel criminal case. In that matter, Willner pled guilty to one count of conspiracy to commit securities fraud and computer intrusions on July 16, 2019 and was sentenced on February 28, 2020 to six months of incarceration and three years of supervised release. He also was ordered to forfeit $350,000 and pay restitution of $897,517.