Imagine making $17 million short selling stocks. You would never want to buy a stock again other than the purchase used to cover a short sale. The SEC charged two brothers on Tuesday who generated more than $17 million in “ill-gotten gains from naked short selling transactions.” The charge is that the brothers (Jeffery and Robert Wolfson) were conducting naked short selling which failed to locate and deliver shares involved in short sales to broker-dealers.
Som of the stocks mentioned were Chipotle Mexican Grill Inc. (NYSE: CMG), Fairfax Financial Holdings Ltd., Novastar Financial Inc., and NYSE Group (NYSE: NYX).
Here is what the SEC claimed to have in its news statement: As Jeffrey Wolfson stated in a recorded telephone conversation, “What I sell them is not guaranteed, it never gets delivered, it’s funny paper.”
The SEC’s Division of Enforcement alleges that Jeffrey Wolfson engaged in illegal naked short sales while working as a broker-dealer himself and later as the principal trader at a Chicago-based broker-dealer that is no longer in business. He also taught his brother and others how to do it. Robert Wolfson conducted illegal naked short sales while trading through an account at New York-based broker-dealer Golden Anchor Trading II LLC, which also has been charged in the SEC’s enforcement action. The firm has changed its name to Barabino Trading LLC.
Top Gaining Stocks
Top Losing Stocks