The Securities and Exchange Commission (SEC) today announced settled charges against Zachary Stevenson of North Point, Florida for perpetrating a fraudulent spoofing scheme that netted him over $380,000 in profits.
According to the SEC’s order, from April 2022 through January 2024, Stevenson repeatedly placed non-bona fide market orders to manipulate the prices of securities and generate quick trading profits. Specifically, the order finds that Stevenson established long or short positions in various thinly-traded securities and then, minutes later, placed one or more limit orders that he did not intend to execute in those securities to manipulate the National Best Bid / Offer. After his non-bona fide limit orders artificially narrowed the National Best Bid / Offer spread, Stevenson exited his position in those securities for a profit, and he then canceled the non-bona fide limit orders.
To avoid detection of his scheme, Stevenson sometimes used multiple brokerage accounts, including accounts at different broker-dealers and/or accounts opened in the names of others.
According to the SEC’s order, Stevenson profited $381,718 from his wrongful conduct.
The SEC’s order finds that Stevenson violated the antifraud provisions of Section 17(a) of the Securities Act of 1933, and Sections 9(a) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
Without admitting or denying the order’s findings, Stevenson consented to a cease-and-desist order and agreed to pay $381,718 in disgorgement, $57,570.48 in prejudgment interest, and a penalty of $150,000. The SEC’s order also requires Stevenson to comply with an undertaking that prohibits him, for a period of four years, from, directly or indirectly, opening, maintaining or trading in any brokerage accounts in his name, the names of any immediate family members, the name of any company over which he has any control, or the names of any third party individuals, without providing the relevant broker-dealers a copy of the SEC’s order.
