SEC v. Hernandez

Hernandez allegedly perpetrated a $2 million “free-riding” scheme. According to the complaint, from approximately November 2018 through January 2022, Hernandez and three other defendants opened and used unfunded brokerage accounts to generate trading profits by engaging in matched trading with other brokerage accounts that they also controlled. The complaint alleged that Hernandez was the mastermind of the scheme and recruited individuals to open and provide him access to and control over the unfunded loser accounts. The complaint further alleged that Hernandez directed the transfer of the trading profits from the winner accounts to himself.

Summary generated from official Securities and Exchange Commission press release