Litigation Release No. 24951 / October 23, 2020
Securities and Exchange Commission v. Joseph Taub, et al., 16 Civ. 09130 (D.N.J.) (filed December 12, 2016)
The SEC complaint, filed on December 12, 2016 and amended on April 26, 2018, alleged that at least 30,000 times between January 2014 and December 2016, Shmalo and co-defendant Joseph Taub engaged in manipulative coordinated trading to influence the market prices of more than 2,500 exchange-traded securities. The complaint further alleged that Shmalo took steps to conceal the trading scheme including by using accounts held in the names of Taub’s associates, regardless of whether Shmalo was designated as an authorized trader in those accounts.
Without admitting or denying the allegations, Shmalo consented to the final judgment, which permanently enjoins him from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933 and the market manipulation provision of Section 9(a)(2) of the Exchange Act. The judgment also imposes a conduct-based injunction prohibiting him for a period of ten years from participating in the issuance, purchase, offer, or sale of any security listed on a national securities exchange except for his own account, and orders him to pay disgorgement of $395,207 and prejudgment interest of $20,007, offset in part by a forfeiture order entered in a related civil forfeiture action.
The Commission’s case remains pending against defendants Joseph Taub and Shaun Greenwald.
The litigation is led by Michael Ellis, Jack Kaufman and Wendy Tepperman, and supervised by Lara Shalov Mehraban of the New York Regional Office.