SEC v. Michael Blumer; John Kuprianchik; David Page; Steven Thompson; and Joseph Todaro, No. 1:23-cv-07250, Eastern District of New York (Sept. 28, 2023) — Complaint

ANTONIA M. APPS
REGIONAL DIRECTOR
Tejal D. Shah
Christopher J. Dunnigan
Alison Conn
Craig Welter
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
100 Pearl Street, Suite 20-100
New York, New York 10004
Phone: (212) 336-0061 (Dunnigan)
Email: [email protected]

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------------- x
SECURITIES AND EXCHANGE    :
COMMISSION,     :
       :
    Plaintiff,  : 23-civ.-7250
       :
v.    :
    : Jury Trial Demanded
MICHAEL BLUMER, JOHN KUPRIANCHIK,  :
DAVID PAGE, STEVEN THOMPSON, AND : ECF Case
JOSEPH TODARO,     :
    Defendants.  :
-------------------------------------------------------------- x

COMPLAINT
Plaintiff Securities and Exchange Commission, for its Complaint against defendants
Michael Blumer (“Blumer”), John Kuprianchik (“Kuprianchik”), David Page (“Page”), Steven
Thompson (“Thompson”), and Joseph Todaro (“Todaro”) (together, “Defendants”), alleges as
follows:

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SUMMARY
1. From at least August 2018 through June 2022 (“the Relevant Period”),
Defendants were registered representatives at Salomon Whitney LLC, a broker-dealer in
Melville, New York doing business under the name SW Financial (“SW Financial”).
2. As registered representatives, Defendants each had an obligation pursuant to the
federal securities laws to have a reasonable basis for the investment recommendations that they
made to their customers.  They failed to fulfill this obligation.
3. During the Relevant Period, Defendants recommended and executed a short-term,
high-volume trading strategy in the accounts of at least sixteen retail customers (“the Affected
Accounts”) without a reasonable basis.  These registered representatives recommended and
executed more than 2,000 trades in the Affected Accounts without regard for the high transaction
costs incurred by the customers.
4. As a result of this high volume of recommended transactions and their attendant
commissions and fees, it would have been virtually impossible for these customers to achieve a
profit in their accounts.  Indeed, the trading resulted in aggregate losses exceeding $1,000,000 in
the Affected Accounts during the Relevant Period.  As a result of the excessive trading they
recommended, the Defendants and SW Financial profited; they collectively received more than
$660,000 in commissions and fees from the excessive trading in the Affected Accounts.
5. The excessive trading recommended by the Defendants violated two separate
obligations of the federal securities laws.  First, each Defendant had an obligation to have a
reasonable basis for his recommendations to clients, which included the obligation to consider
the costs imposed by the recommended trades in the client accounts.  Defendants each violated
the antifraud provisions of the federal securities laws because they knew or recklessly

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disregarded that their recommendations to their customers were unsuitable.  Second, each
Defendant also violated the care obligation of Regulation Best Interest (“Reg BI”) because they
failed to exercise reasonable diligence, care and skill in order to have a reasonable basis to
believe that the series of recommended transactions in the Affected Accounts, even if in the retail
customer’s best interest when viewed in isolation, was not excessive and was in the retail
customer’s best interest when taken together in light of the retail customer’s investment profile,
and did not place the financial or other interest of the broker, dealer, or associated person making
the series of recommendations ahead of the interest of the retail customer, from the beginning of
Reg BI’s effective period, June 30, 2020, through June 2022 (“The Reg BI Period”).
VIOLATIONS
6. By virtue of the conduct alleged herein, the Defendants, directly or indirectly,
singly or in concert, violated and are otherwise liable for violations of Section 17(a)(1) and (3) of
the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)(1) and (3)], Section 10(b) of
the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rules 10b-5(a)
and (c) [17 C.F.R. § 240.10b-5(a) and (c)] and 15l-1 [17 C.F.R. § 240.15l-1] thereunder.
7. Unless the Defendants are permanently restrained and enjoined, the Defendants
will again engage in the acts, practices, transactions, and courses of business set forth in this
complaint and in acts, practices, transactions, and courses of business of similar type and object.
JURISDICTION AND VENUE
8. The Commission brings this action pursuant to authority conferred by Section
20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Section 21(d)(1) of the Exchange Act [15
U.S.C. § 78u(d)(1)], seeking a final judgment: (1) restraining and permanently enjoining each of
the Defendants from engaging in the acts, practices and courses of business alleged against them

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herein; (b) ordering each of the Defendants to disgorge all ill-gotten gains and to pay
prejudgment interest on those amounts pursuant to Sections 21(d)(3), 21(d)(5) and 21(d)(7) of
the Exchange Act [15 U.S.C. § 78u(d)(3), (d)(5) and (d)(7)]; and (c) imposing civil money
penalties on each of the Defendants pursuant to Section 20(d) of the Securities Act [15 U.S.C. §
77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)].
9. This Court has jurisdiction over this action pursuant to Section 22(a) of the
Securities Act [15 U.S.C. 77v(a)], and Sections 21(d), 21(e), and 27 of the Exchange Act [15
U.S.C. §§ 78u(d), 78u(e). and 78aa].  The Defendants, either directly or indirectly, have made
use of the means or instrumentalities of interstate commerce, of the mails, of the facilities of
national securities exchanges, and/or the means or instruments of transportation or
communication in interstate commerce in connection with the acts, practices, and courses of
business alleged herein.
10. Venue lies in the Eastern District of New York pursuant to Section 22(a) of the
Securities Act [15 U.S.C. § 77v(a)], and Section 27 of the Exchange Act [15 U.S.C. § 78aa].
Certain of the acts, practices, transactions, and courses of business alleged in this complaint
occurred within the Eastern District of New York.  Specifically, Defendants engaged in this
violative conduct while working at SW Financial’s office or their homes in the Eastern District
of New York during the relevant time period.
DEFENDANTS
11. Blumer, age 37, resides in Staten Island, New York, and was associated with SW
Financial from December 2019 to February 2023.  He was registered with FINRA from 2004
through July 2023 and held FINRA Series 7 and 63 licenses.

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12. Kuprianchik, age 57, resides in Northport, New York, and was associated with
SW Financial from August 2020 to January 2022.  He was registered with FINRA from 2001
through January 2022 and held FINRA Series 7 and 63 licenses.  Kuprianchik was suspended
and fined by FINRA in 2007 for exercising discretion in a customer account without written
authorization and making exaggerated and misleading statements or claims to a customer, and in
2016 for failing to timely disclose unsatisfied tax liens on his Form U4.
13. Page, age 59, resides in Huntington, New York, and was associated with SW
Financial from August 2018 to May 2023.  He was registered with FINRA from 1997 through
July 2023 and held FINRA Series 7, 9, 24, 63, and 65 licenses.
14. Thompson, age 25, resides in West Babylon, New York, and was associated with
SW Financial from August 2020 to December 2021.  He was registered with FINRA from 2020
through June 2022 and held FINRA Series 7 and 63 licenses. Thompson was barred by FINRA
on September 5, 2023 from associating with any FINRA firm in all capacities for failing to
respond to FINRA requests for information.
15. Todaro, age 32, resides in Commack, New York, and was associated with SW
Financial from August 2020 to December 2021.  He was registered with FINRA from 2012
through April 2023 and held FINRA Series 7 and 63 licenses.  Todaro was barred by FINRA on
July 20, 2023 from associating with any FINRA firm in all capacities for failing to respond to
FINRA requests for information.
RELATED ENTITY
16. SW Financial, a New York limited liability company with its former principal
place of business in Melville, New York, has been registered with the Commission as a broker-
dealer since 2008.  During the Relevant Period, SW Financial had more than 1,500 retail

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customer accounts.  On May 12, 2023, SW Financial was expelled from FINRA membership
after a settlement with FINRA finding that SW Financial willfully violated Section 10(b) of the
Exchange Act and Rules 10b-5 and 15l-1(a)(1) thereunder.
FACTS
A. Defendants’ Series of Recommendations with No Reasonable Basis
17. During the Relevant Period, and including the Reg BI Period, Defendants
recommended a short-term, high-volume investment strategy to at least sixteen of their retail
customers without a reasonable basis.  The Proposed Defendants recommended rapid buying and
selling of securities in the retail customers’ brokerage accounts, often including a purchase, sale,
and then subsequent repurchase of the same stock in the same week, or even on the same or
consecutive days.
18. The cost-to-equity ratio is the annualized rate of return required for an investor’s
account to break even, taking into account the costs, such as commissions and other fees
associated with the trading in the account.
19. The annual turnover ratio represents the total value of annual purchases made in
the account divided by the account’s average monthly balance.
20. The extremely high cost-to-equity ratio in the Affected Accounts, shown in the
charts below, is indicative of excessive trading in these accounts during the Relevant Period.
The cost-to-equity ratio for many of these accounts exceeded 100% annually, meaning that a
customer would need an annual return of more than 100% in the investments in his or her
account just to pay the commissions and fees charged by Defendants, making it virtually
impossible for the customer to make a profit.

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21. The high annual turnover rate in the Affected Accounts further demonstrates the
excessive rate of trading recommended by the Defendants.  Defendants knowingly or recklessly
disregarded the fact that the high-cost pattern of frequent trading they recommended for the
Affected Accounts had virtually no chance of generating any profit.  The pattern of frequent
trading recommended by Defendants was not suitable for or in the best interest of those
customers in the Affected Accounts.
22. In addition to cost-to-equity ratios and turnover ratios, the below charts also set
forth the customer losses that resulted from these trade recommendations during the Relevant
Period and the Reg BI Period.  These losses in the Affected Accounts exceeded $1,000,000 in
aggregate over the Relevant Period.  As indicated below, while the customers suffered
substantially from the excessive trading recommended by Defendants in their accounts, these
registered representatives and SW Financial benefited significantly from their trade
recommendations, reaping over $660,000 in commissions and fees from these trades.
Relevant Period
Account Rep Customer
1
 Trade
Period
Cost/
Equity
Annual
Turnover
Rate
Losses Commissions/Fees
Blumer #1 4/20 – 7/21 401% 114 $15,421 $20,285
Blumer #2 1/20 – 2/22 80% 28 $320,057 $270,080
Blumer #3 7/20 – 5/21 125% 35 $22,968 $24,814
Page #4 2/19 – 3/20 85% 32 $85,269 $19,237
Page #5 2/19 – 8/20 28% 9 $58,334 $10,686
Page #6 8/18 – 4/21 49% 20 $54,153 $72,602
Kuprianchik #7 9/20 – 1/22 112% 46 $43,001 $19,441
Kuprianchik #8 9/20 – 2/22 113% 41 $39,850 $10,802
Kuprianchik #9 9/20 – 6/22 84% 25 $27,951 $21,309
Todaro #10 9/20 – 3/21 219% 200 $130,738 $62,918
Todaro #11 9/20 – 11/21 89% 57 $39,095 $49,734
Todaro #12 9/20 – 12/21 133% 60 $14,071 $19,247
Todaro #13 1/21 – 12/21 26% 16 $119,943 $29,427
Todaro/Thompson #14 9/20 – 11/21 157% 53 $17,665 $17,372
Todaro/Thompson #15 9/20 – 11/21 180% 55 $6485 $7681

1
 Defrauded customers are referred to herein by number.

8

Thompson #16 9/20 – 3/21 106% 36 $9104 $5274
Reg BI Period
Account Rep Customer Trade
Period
Cost/Eq
uity
Annual
Turnover
Loss Commissions
/Fees
Blumer #1 7/20 – 7/21 138% 35 +$1058 (gain) $2,285
Blumer #2 7/20 – 2/22 65% 24 $94,840 $153,538
Blumer #3 7/20 – 5/21 125% 35 $22,968 $24,814
Page #5 7/20 – 8/20 25% 8 $30,183 $4190
Page #6 7/20 – 4/21 25% 13 $25,523 $5600
Kuprianchik #7 9/20 – 1/22 112% 46 $43,001 $19,441
Kuprianchik #8 9/20 – 2/22 113% 41 $39,850 $10,802
Kuprianchik #9 9/20 – 6/22 84% 25 $27,951 $21,309
Todaro #10 9/20 – 3/21 219% 200 $130,738 $62,918
Todaro #11 9/20 – 11/21 89% 57 $39,095 $49,734
Todaro #12 9/20 – 12/21 133% 60 $14,071 $19,247
Todaro #13 1/21 – 12/21 26% 16 $119,943 $29,427
Todaro/Thompson #14 9/20 – 11/21 157% 53 $17,665 $17,372
Todaro/Thompson #15 9/20 – 11/21 180% 55 $6485 $7681
Thompson #16 9/20 – 3/21 106% 36 $9104 $5274

23. Blumer’s recommendations to Customers #1, 2 and 3 resulted in losses of
approximately $358,446 in the Affected Accounts during the Relevant Period, while he earned
commissions totaling approximately $231,788 from these recommendations, of which $116,750
of the losses and $178,063 in commissions were during the Reg BI Period.
24. Page’s recommendations to Customers #4, 5 and 6 resulted in losses of
approximately $197,756 in the Affected Accounts during the Relevant Period, while he earned
commissions totaling approximately $54,286 from these recommendations, of which $55,706 of
the losses and $9,790 in commissions were during the Reg BI Period.
25. Kuprianchik’s recommendations to Customers #7, 8 and 9 resulted in losses of
approximately $110,802 in the Affected Accounts during the Relevant Period, while he earned
commissions totaling approximately $22,504 from these recommendations, all of which occurred
during the Reg BI Period.

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26. Todaro’s recommendations to Customers #10, 11, 12 and 13 resulted in losses of
approximately $303,847 in the Affected Accounts during the Relevant Period, while he earned
commissions totaling approximately $60,259 from these recommendations, all of which occurred
during the Reg BI Period.
27. Thompson’s recommendations to Customer #17 resulted in losses of
approximately $9,104 in the Affected Accounts during the Relevant Period, while he earned
commissions totaling approximately $1,682 from these recommendations, all of which occurred
during the Reg BI Period.
28. Recommendations by Todaro and/or Thompson to Customers #15 and 16, for
which they were both representatives, resulted in losses of approximately $24,150 in the
Affected Accounts during the Relevant Period, while they earned commissions totaling
approximately $10,474 from these recommendations, all of which occurred during the Reg BI
Period.
29. As a registered representative of a broker-dealer, each Defendant was required to
have a reasonable basis to believe that the recommendations he made were suitable for their
customers.  A registered representative must understand the risks and rewards, and potential
consequences, of the recommendations they make to their customers.  Given that each Defendant
recommended a pattern of frequent trading, each had an obligation to determine whether his
recommendations, which imposed exceedingly high costs on the customer, were suitable and in
their customers’ best interests.
30. Registered representatives’ obligations to make recommendations that have a
“reasonable basis” and which are “suitable” for their customers are well-known in the industry,

10

and Defendants were well aware of those obligations from their years of work at various broker-
dealers.
31. Defendants knew, or were reckless in not knowing, that they had no reasonable
basis for the series of recommendations they made to the customers who held the Affected
Accounts.  Defendants failed to take into consideration that the high costs they imposed by the
level of trading they recommended would make it virtually impossible for the Affected Accounts
to achieve any profit.
32. In addition, as of June 30, 2020, Reg BI imposed an obligation on Defendants, as
associated persons of a broker, when making recommendations to retail customers, to exercise
reasonable diligence, care and skill to have a reasonable basis to believe that the series of
recommended transactions, even if in the retail customer’s best interest when viewed in isolation,
is not excessive and in the retail customer’s best interest when taken together in light of the retail
customer’s investment profile and does not place the financial or other interest of the broker,
dealer, or associated person making the series of recommendations ahead of the interest of the
retail customer.
33. Defendants had no reasonable basis to believe the series of recommendations they
made during the Reg BI Period in the Affected Accounts were in those customers’ best interest.
34. Defendants failed to take into consideration that the high costs of the series of
trades they recommended made it virtually impossible for any customer to achieve even a
minimal profit, and placed their own interest over the interest of their customers.

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FIRST CLAIM FOR RELIEF

Violations of Section 17(a)(1) of the Securities Act (All Defendants)

35. The Commission re-alleges and incorporates by reference herein each and every
allegation contained in paragraphs 1 through 25, as if fully set forth herein.
36. The Defendants, directly or indirectly, singly or in concert, in the offer or sale of
securities and by the use of the means or instruments of transportation or communication in
interstate commerce or by use of the mails have employed devices, schemes, or artifices to
defraud.
37. By reason of the foregoing, the Defendants, directly or indirectly, singly or in
concert, have violated, and unless enjoined, will again violate Section 17(a)(1) of the Securities
Act [15 U.S.C. § 77q(a)(1)].
SECOND CLAIM FOR RELIEF
Violations of Section 17(a)(3) of the Securities Act (All Defendants)
38. The Commission re-alleges and incorporates by reference herein each and every
allegation contained in paragraphs 1 through 31, as if fully set forth herein.
39. The Defendants, directly or indirectly, singly or in concert, in the offer or sale of
securities and by the use of the means or instruments of transportation or communication in
interstate commerce or by use of the mails have engaged in transactions, practices, or courses of
business which operated or would operate as a fraud or deceit upon purchasers of securities and
upon other persons.
40. By reason of the foregoing, the Defendants, directly or indirectly, singly or in
concert, have violated, and unless enjoined, will again violate Section 17(a)(3) of the Securities
Act [15 U.S.C. § 77q(a)(3)].

12

THIRD CLAIM FOR RELIEF

Violations of Section 10(b) of the Exchange Act and Rule 10b-5(a) and (c) Thereunder
(All Defendants)

41. The Commission re-alleges and incorporates by reference herein each and every
allegation contained in paragraphs 1 through 31, as if fully set forth herein.
42. The Defendants, directly or indirectly, singly or in concert, in connection with the
purchase or sale of securities and by the use of the means or instrumentalities of interstate
commerce or of the mails, or of the facilities of a national securities exchange, have: (a)
employed devices, schemes, or artifices to defraud; and/or (b) engaged in acts, transactions,
practices, or courses of business which operated or would operate as a fraud or deceit upon other
persons.
43. By reason of the foregoing, the Defendants, directly or indirectly, singly or in
concert, have violated, and unless enjoined, again violate Section 10(b) of the Exchange Act [15
U.S.C. § 78j(b)] and Rule 10b-5(a) and (c) thereunder [17 C.F.R. § 240.10b-5(a) and (c)].
THIRD CLAIM FOR RELIEF
Violations of Exchange Act Rule 15l-1 (All Defendants)
44. The Commission re-alleges and incorporates by reference herein each and every
allegation contained in paragraphs 1 through 28 and 32 through 34, as if fully set forth herein.
45. The Defendants, directly or indirectly, singly or in concert, as associated persons
of a broker or dealer, when making a recommendation of any securities transaction or investment
strategy involving securities to a retail customers, failed to act in the best interest of the retail
customer at the time the recommendation was made, without placing the financial or other

13

interest of the associated person of a broker or dealer making the recommendation ahead of the
interest of the retail customer.
46. By reason of the foregoing, the Defendants, directly or indirectly, singly or in
concert, have violated, and unless enjoined, will again violate Exchange Act Rule 15l-1
thereunder [17 C.F.R. § 240.15l-1].

PRAYER FOR RELIEF
 WHEREFORE, the Commission respectfully requests that this Court enter a Final
Judgment:
I.
Finding Defendants violated the securities laws and rules as alleged against them here;
II.
Permanently enjoining each of the Defendants and their agents, servants, employees and
attorneys and all persons in active concert or participation with any of them from violating
directly or indirectly, Securities Act Section 17(a) [15 U.S.C. § 77q(a)] and Exchange Act
Section 10(b) [15 U.S.C. §§ 78j(b)] and Rules 10b-5 [17 C.F.R. § 240.10b-5] and 15l-1 [17
C.F.R. § 240.15l-1] thereunder;
III.
Ordering each of the Defendants to disgorge any ill-gotten gains obtained as a result of
the violations alleged in the Complaint pursuant to Exchange Act Sections 21(d)(3), 21(d)(5) and
21(d)(7) [15 U.S.C. § 78u(d)(3), (d)(5) and (d)(7)], and ordering them to pay prejudgment
interest thereon;

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IV.
Ordering each of the Defendants to pay civil monetary penalties pursuant to Section
20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15
U.S.C. § 78u(d)(3)]; and
V.
Granting such other and further relief as the Court may deem just and proper.
JURY DEMAND
Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the Commission demands
that this case be tried to a jury.

Dated: September 28, 2023
New York, NY

Respectfully submitted,

SECURITIES AND EXCHANGE COMMISSION

____________________________
Antonia M. Apps
Regional Director
Tejal D. Shah
Christopher J. Dunnigan
      Alison Conn
      Craig Welter
Attorneys for Plaintiff
      SECURITIES AND EXCHANGE COMMISSION
      New York Regional Office
      100 Pearl Street, Suite 20-100
      New York, New York 10004
      Phone: (212) 336-0061 (Dunnigan)
Email: [email protected]

Attorneys for Plaintiff

ANTONIA M. APPS 

REGIONAL DIRECTOR 

Tejal D. Shah 

Christopher J. Dunnigan 

Alison Conn 

Craig Welter 

Attorneys for Plaintiff 

SECURITIES AND EXCHANGE COMMISSION 

New York Regional Office 

100 Pearl Street, Suite 20-100 

New York, New York 10004 

Phone: (212) 336-0061 (Dunnigan) 

Email: [email protected] 

 

 

UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF NEW YORK 

-------------------------------------------------------------- x 
SECURITIES AND EXCHANGE    : 
COMMISSION,     : 
       : 
    Plaintiff,  : 23-civ.-7250 
       : 

v.    : 
    : Jury Trial Demanded 

MICHAEL BLUMER, JOHN KUPRIANCHIK,  : 
DAVID PAGE, STEVEN THOMPSON, AND : ECF Case 
JOSEPH TODARO,     : 
    Defendants.  : 
-------------------------------------------------------------- x 

 

 

COMPLAINT 

Plaintiff Securities and Exchange Commission, for its Complaint against defendants 

Michael Blumer (“Blumer”), John Kuprianchik (“Kuprianchik”), David Page (“Page”), Steven 

Thompson (“Thompson”), and Joseph Todaro (“Todaro”) (together, “Defendants”), alleges as 

follows: 

 

 

 

Case 1:23-cv-07250   Document 1   Filed 09/28/23   Page 1 of 14 PageID #: 1



2 

 

SUMMARY 

1. From at least August 2018 through June 2022 (“the Relevant Period”), 

Defendants were registered representatives at Salomon Whitney LLC, a broker-dealer in 

Melville, New York doing business under the name SW Financial (“SW Financial”). 

2. As registered representatives, Defendants each had an obligation pursuant to the 

federal securities laws to have a reasonable basis for the investment recommendations that they 

made to their customers.  They failed to fulfill this obligation. 

3. During the Relevant Period, Defendants recommended and executed a short-term, 

high-volume trading strategy in the accounts of at least sixteen retail customers (“the Affected 

Accounts”) without a reasonable basis.  These registered representatives recommended and 

executed more than 2,000 trades in the Affected Accounts without regard for the high transaction 

costs incurred by the customers. 

4. As a result of this high volume of recommended transactions and their attendant 

commissions and fees, it would have been virtually impossible for these customers to achieve a 

profit in their accounts.  Indeed, the trading resulted in aggregate losses exceeding $1,000,000 in 

the Affected Accounts during the Relevant Period.  As a result of the excessive trading they 

recommended, the Defendants and SW Financial profited; they collectively received more than 

$660,000 in commissions and fees from the excessive trading in the Affected Accounts.   

5. The excessive trading recommended by the Defendants violated two separate 

obligations of the federal securities laws.  First, each Defendant had an obligation to have a 

reasonable basis for his recommendations to clients, which included the obligation to consider 

the costs imposed by the recommended trades in the client accounts.  Defendants each violated 

the antifraud provisions of the federal securities laws because they knew or recklessly 

Case 1:23-cv-07250   Document 1   Filed 09/28/23   Page 2 of 14 PageID #: 2



3 

 

disregarded that their recommendations to their customers were unsuitable.  Second, each 

Defendant also violated the care obligation of Regulation Best Interest (“Reg BI”) because they 

failed to exercise reasonable diligence, care and skill in order to have a reasonable basis to 

believe that the series of recommended transactions in the Affected Accounts, even if in the retail 

customer’s best interest when viewed in isolation, was not excessive and was in the retail 

customer’s best interest when taken together in light of the retail customer’s investment profile, 

and did not place the financial or other interest of the broker, dealer, or associated person making 

the series of recommendations ahead of the interest of the retail customer, from the beginning of 

Reg BI’s effective period, June 30, 2020, through June 2022 (“The Reg BI Period”).   

VIOLATIONS 

6. By virtue of the conduct alleged herein, the Defendants, directly or indirectly, 

singly or in concert, violated and are otherwise liable for violations of Section 17(a)(1) and (3) of 

the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)(1) and (3)], Section 10(b) of 

the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rules 10b-5(a) 

and (c) [17 C.F.R. § 240.10b-5(a) and (c)] and 15l-1 [17 C.F.R. § 240.15l-1] thereunder. 

7. Unless the Defendants are permanently restrained and enjoined, the Defendants 

will again engage in the acts, practices, transactions, and courses of business set forth in this 

complaint and in acts, practices, transactions, and courses of business of similar type and object.  

JURISDICTION AND VENUE 

8. The Commission brings this action pursuant to authority conferred by Section 

20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Section 21(d)(1) of the Exchange Act [15 

U.S.C. § 78u(d)(1)], seeking a final judgment: (1) restraining and permanently enjoining each of 

the Defendants from engaging in the acts, practices and courses of business alleged against them 

Case 1:23-cv-07250   Document 1   Filed 09/28/23   Page 3 of 14 PageID #: 3



4 

 

herein; (b) ordering each of the Defendants to disgorge all ill-gotten gains and to pay 

prejudgment interest on those amounts pursuant to Sections 21(d)(3), 21(d)(5) and 21(d)(7) of 

the Exchange Act [15 U.S.C. § 78u(d)(3), (d)(5) and (d)(7)]; and (c) imposing civil money 

penalties on each of the Defendants pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 

77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]. 

9. This Court has jurisdiction over this action pursuant to Section 22(a) of the 

Securities Act [15 U.S.C. 77v(a)], and Sections 21(d), 21(e), and 27 of the Exchange Act [15 

U.S.C. §§ 78u(d), 78u(e). and 78aa].  The Defendants, either directly or indirectly, have made 

use of the means or instrumentalities of interstate commerce, of the mails, of the facilities of 

national securities exchanges, and/or the means or instruments of transportation or 

communication in interstate commerce in connection with the acts, practices, and courses of 

business alleged herein. 

10. Venue lies in the Eastern District of New York pursuant to Section 22(a) of the 

Securities Act [15 U.S.C. § 77v(a)], and Section 27 of the Exchange Act [15 U.S.C. § 78aa].  

Certain of the acts, practices, transactions, and courses of business alleged in this complaint 

occurred within the Eastern District of New York.  Specifically, Defendants engaged in this 

violative conduct while working at SW Financial’s office or their homes in the Eastern District 

of New York during the relevant time period. 

DEFENDANTS 

11. Blumer, age 37, resides in Staten Island, New York, and was associated with SW 

Financial from December 2019 to February 2023.  He was registered with FINRA from 2004 

through July 2023 and held FINRA Series 7 and 63 licenses. 

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12. Kuprianchik, age 57, resides in Northport, New York, and was associated with 

SW Financial from August 2020 to January 2022.  He was registered with FINRA from 2001 

through January 2022 and held FINRA Series 7 and 63 licenses.  Kuprianchik was suspended 

and fined by FINRA in 2007 for exercising discretion in a customer account without written 

authorization and making exaggerated and misleading statements or claims to a customer, and in 

2016 for failing to timely disclose unsatisfied tax liens on his Form U4. 

13. Page, age 59, resides in Huntington, New York, and was associated with SW 

Financial from August 2018 to May 2023.  He was registered with FINRA from 1997 through 

July 2023 and held FINRA Series 7, 9, 24, 63, and 65 licenses. 

14. Thompson, age 25, resides in West Babylon, New York, and was associated with 

SW Financial from August 2020 to December 2021.  He was registered with FINRA from 2020 

through June 2022 and held FINRA Series 7 and 63 licenses. Thompson was barred by FINRA 

on September 5, 2023 from associating with any FINRA firm in all capacities for failing to 

respond to FINRA requests for information. 

15. Todaro, age 32, resides in Commack, New York, and was associated with SW 

Financial from August 2020 to December 2021.  He was registered with FINRA from 2012 

through April 2023 and held FINRA Series 7 and 63 licenses.  Todaro was barred by FINRA on 

July 20, 2023 from associating with any FINRA firm in all capacities for failing to respond to 

FINRA requests for information. 

RELATED ENTITY 

16. SW Financial, a New York limited liability company with its former principal 

place of business in Melville, New York, has been registered with the Commission as a broker-

dealer since 2008.  During the Relevant Period, SW Financial had more than 1,500 retail 

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customer accounts.  On May 12, 2023, SW Financial was expelled from FINRA membership 

after a settlement with FINRA finding that SW Financial willfully violated Section 10(b) of the 

Exchange Act and Rules 10b-5 and 15l-1(a)(1) thereunder. 

FACTS 

A. Defendants’ Series of Recommendations with No Reasonable Basis 

17. During the Relevant Period, and including the Reg BI Period, Defendants 

recommended a short-term, high-volume investment strategy to at least sixteen of their retail 

customers without a reasonable basis.  The Proposed Defendants recommended rapid buying and 

selling of securities in the retail customers’ brokerage accounts, often including a purchase, sale, 

and then subsequent repurchase of the same stock in the same week, or even on the same or 

consecutive days. 

18. The cost-to-equity ratio is the annualized rate of return required for an investor’s 

account to break even, taking into account the costs, such as commissions and other fees 

associated with the trading in the account.   

19. The annual turnover ratio represents the total value of annual purchases made in 

the account divided by the account’s average monthly balance.   

20. The extremely high cost-to-equity ratio in the Affected Accounts, shown in the 

charts below, is indicative of excessive trading in these accounts during the Relevant Period.  

The cost-to-equity ratio for many of these accounts exceeded 100% annually, meaning that a 

customer would need an annual return of more than 100% in the investments in his or her 

account just to pay the commissions and fees charged by Defendants, making it virtually 

impossible for the customer to make a profit.   

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21. The high annual turnover rate in the Affected Accounts further demonstrates the 

excessive rate of trading recommended by the Defendants.  Defendants knowingly or recklessly 

disregarded the fact that the high-cost pattern of frequent trading they recommended for the 

Affected Accounts had virtually no chance of generating any profit.  The pattern of frequent 

trading recommended by Defendants was not suitable for or in the best interest of those 

customers in the Affected Accounts. 

22. In addition to cost-to-equity ratios and turnover ratios, the below charts also set 

forth the customer losses that resulted from these trade recommendations during the Relevant 

Period and the Reg BI Period.  These losses in the Affected Accounts exceeded $1,000,000 in 

aggregate over the Relevant Period.  As indicated below, while the customers suffered 

substantially from the excessive trading recommended by Defendants in their accounts, these 

registered representatives and SW Financial benefited significantly from their trade 

recommendations, reaping over $660,000 in commissions and fees from these trades.                                        

Relevant Period 

Account Rep Customer1 Trade 

Period 

Cost/ 

Equity 

Annual 

Turnover 

Rate 

Losses Commissions/Fees 

Blumer #1 4/20 – 7/21 401% 114 $15,421 $20,285 

Blumer #2 1/20 – 2/22 80% 28 $320,057 $270,080 

Blumer #3 7/20 – 5/21 125% 35 $22,968 $24,814 

Page #4 2/19 – 3/20 85% 32 $85,269 $19,237 

Page #5 2/19 – 8/20 28% 9 $58,334 $10,686 

Page #6 8/18 – 4/21 49% 20 $54,153 $72,602 

Kuprianchik #7 9/20 – 1/22 112% 46 $43,001 $19,441 

Kuprianchik #8 9/20 – 2/22 113% 41 $39,850 $10,802 

Kuprianchik #9 9/20 – 6/22 84% 25 $27,951 $21,309 

Todaro #10 9/20 – 3/21 219% 200 $130,738 $62,918 

Todaro #11 9/20 – 11/21 89% 57 $39,095 $49,734 

Todaro #12 9/20 – 12/21 133% 60 $14,071 $19,247 

Todaro #13 1/21 – 12/21 26% 16 $119,943 $29,427 

Todaro/Thompson #14 9/20 – 11/21 157% 53 $17,665 $17,372 

Todaro/Thompson #15 9/20 – 11/21 180% 55 $6485 $7681 

 
1 Defrauded customers are referred to herein by number. 

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Thompson #16 9/20 – 3/21 106% 36 $9104 $5274 

Reg BI Period 

Account Rep Customer Trade 

Period 

Cost/Eq

uity 

Annual 

Turnover 

Loss Commissions

/Fees 

Blumer #1 7/20 – 7/21 138% 35 +$1058 (gain) $2,285 

Blumer #2 7/20 – 2/22 65% 24 $94,840 $153,538 

Blumer #3 7/20 – 5/21 125% 35 $22,968 $24,814 

Page #5 7/20 – 8/20 25% 8 $30,183 $4190 

Page #6 7/20 – 4/21 25% 13 $25,523 $5600 

Kuprianchik #7 9/20 – 1/22 112% 46 $43,001 $19,441 

Kuprianchik #8 9/20 – 2/22 113% 41 $39,850 $10,802 

Kuprianchik #9 9/20 – 6/22 84% 25 $27,951 $21,309 

Todaro #10 9/20 – 3/21 219% 200 $130,738 $62,918 

Todaro #11 9/20 – 11/21 89% 57 $39,095 $49,734 

Todaro #12 9/20 – 12/21 133% 60 $14,071 $19,247 

Todaro #13 1/21 – 12/21 26% 16 $119,943 $29,427 

Todaro/Thompson #14 9/20 – 11/21 157% 53 $17,665 $17,372 

Todaro/Thompson #15 9/20 – 11/21 180% 55 $6485 $7681 

Thompson #16 9/20 – 3/21 106% 36 $9104 $5274 

 

23. Blumer’s recommendations to Customers #1, 2 and 3 resulted in losses of 

approximately $358,446 in the Affected Accounts during the Relevant Period, while he earned 

commissions totaling approximately $231,788 from these recommendations, of which $116,750 

of the losses and $178,063 in commissions were during the Reg BI Period. 

24. Page’s recommendations to Customers #4, 5 and 6 resulted in losses of 

approximately $197,756 in the Affected Accounts during the Relevant Period, while he earned 

commissions totaling approximately $54,286 from these recommendations, of which $55,706 of 

the losses and $9,790 in commissions were during the Reg BI Period. 

25. Kuprianchik’s recommendations to Customers #7, 8 and 9 resulted in losses of 

approximately $110,802 in the Affected Accounts during the Relevant Period, while he earned 

commissions totaling approximately $22,504 from these recommendations, all of which occurred 

during the Reg BI Period. 

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26. Todaro’s recommendations to Customers #10, 11, 12 and 13 resulted in losses of 

approximately $303,847 in the Affected Accounts during the Relevant Period, while he earned 

commissions totaling approximately $60,259 from these recommendations, all of which occurred 

during the Reg BI Period. 

27. Thompson’s recommendations to Customer #17 resulted in losses of 

approximately $9,104 in the Affected Accounts during the Relevant Period, while he earned 

commissions totaling approximately $1,682 from these recommendations, all of which occurred 

during the Reg BI Period. 

28. Recommendations by Todaro and/or Thompson to Customers #15 and 16, for 

which they were both representatives, resulted in losses of approximately $24,150 in the 

Affected Accounts during the Relevant Period, while they earned commissions totaling 

approximately $10,474 from these recommendations, all of which occurred during the Reg BI 

Period. 

29. As a registered representative of a broker-dealer, each Defendant was required to 

have a reasonable basis to believe that the recommendations he made were suitable for their 

customers.  A registered representative must understand the risks and rewards, and potential 

consequences, of the recommendations they make to their customers.  Given that each Defendant 

recommended a pattern of frequent trading, each had an obligation to determine whether his 

recommendations, which imposed exceedingly high costs on the customer, were suitable and in 

their customers’ best interests.  

30. Registered representatives’ obligations to make recommendations that have a 

“reasonable basis” and which are “suitable” for their customers are well-known in the industry, 

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and Defendants were well aware of those obligations from their years of work at various broker-

dealers. 

31. Defendants knew, or were reckless in not knowing, that they had no reasonable 

basis for the series of recommendations they made to the customers who held the Affected 

Accounts.  Defendants failed to take into consideration that the high costs they imposed by the 

level of trading they recommended would make it virtually impossible for the Affected Accounts 

to achieve any profit. 

32. In addition, as of June 30, 2020, Reg BI imposed an obligation on Defendants, as 

associated persons of a broker, when making recommendations to retail customers, to exercise 

reasonable diligence, care and skill to have a reasonable basis to believe that the series of 

recommended transactions, even if in the retail customer’s best interest when viewed in isolation, 

is not excessive and in the retail customer’s best interest when taken together in light of the retail 

customer’s investment profile and does not place the financial or other interest of the broker, 

dealer, or associated person making the series of recommendations ahead of the interest of the 

retail customer. 

33. Defendants had no reasonable basis to believe the series of recommendations they 

made during the Reg BI Period in the Affected Accounts were in those customers’ best interest.   

34. Defendants failed to take into consideration that the high costs of the series of 

trades they recommended made it virtually impossible for any customer to achieve even a 

minimal profit, and placed their own interest over the interest of their customers. 

 

 

 

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FIRST CLAIM FOR RELIEF 

 

Violations of Section 17(a)(1) of the Securities Act (All Defendants) 

 

35. The Commission re-alleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 25, as if fully set forth herein. 

36. The Defendants, directly or indirectly, singly or in concert, in the offer or sale of 

securities and by the use of the means or instruments of transportation or communication in 

interstate commerce or by use of the mails have employed devices, schemes, or artifices to 

defraud. 

37. By reason of the foregoing, the Defendants, directly or indirectly, singly or in 

concert, have violated, and unless enjoined, will again violate Section 17(a)(1) of the Securities 

Act [15 U.S.C. § 77q(a)(1)]. 

SECOND CLAIM FOR RELIEF 

Violations of Section 17(a)(3) of the Securities Act (All Defendants) 

38. The Commission re-alleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 31, as if fully set forth herein. 

39. The Defendants, directly or indirectly, singly or in concert, in the offer or sale of 

securities and by the use of the means or instruments of transportation or communication in 

interstate commerce or by use of the mails have engaged in transactions, practices, or courses of 

business which operated or would operate as a fraud or deceit upon purchasers of securities and 

upon other persons. 

40. By reason of the foregoing, the Defendants, directly or indirectly, singly or in 

concert, have violated, and unless enjoined, will again violate Section 17(a)(3) of the Securities 

Act [15 U.S.C. § 77q(a)(3)]. 

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THIRD CLAIM FOR RELIEF 

 

Violations of Section 10(b) of the Exchange Act and Rule 10b-5(a) and (c) Thereunder  

(All Defendants) 

 

41. The Commission re-alleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 31, as if fully set forth herein. 

42. The Defendants, directly or indirectly, singly or in concert, in connection with the 

purchase or sale of securities and by the use of the means or instrumentalities of interstate 

commerce or of the mails, or of the facilities of a national securities exchange, have: (a) 

employed devices, schemes, or artifices to defraud; and/or (b) engaged in acts, transactions, 

practices, or courses of business which operated or would operate as a fraud or deceit upon other 

persons. 

43. By reason of the foregoing, the Defendants, directly or indirectly, singly or in 

concert, have violated, and unless enjoined, again violate Section 10(b) of the Exchange Act [15 

U.S.C. § 78j(b)] and Rule 10b-5(a) and (c) thereunder [17 C.F.R. § 240.10b-5(a) and (c)]. 

THIRD CLAIM FOR RELIEF 

Violations of Exchange Act Rule 15l-1 (All Defendants) 

44. The Commission re-alleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 28 and 32 through 34, as if fully set forth herein. 

45. The Defendants, directly or indirectly, singly or in concert, as associated persons 

of a broker or dealer, when making a recommendation of any securities transaction or investment 

strategy involving securities to a retail customers, failed to act in the best interest of the retail 

customer at the time the recommendation was made, without placing the financial or other 

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interest of the associated person of a broker or dealer making the recommendation ahead of the 

interest of the retail customer. 

46. By reason of the foregoing, the Defendants, directly or indirectly, singly or in 

concert, have violated, and unless enjoined, will again violate Exchange Act Rule 15l-1 

thereunder [17 C.F.R. § 240.15l-1]. 

 

PRAYER FOR RELIEF 

 WHEREFORE, the Commission respectfully requests that this Court enter a Final 

Judgment: 

I.  

Finding Defendants violated the securities laws and rules as alleged against them here;  

II.  

Permanently enjoining each of the Defendants and their agents, servants, employees and 

attorneys and all persons in active concert or participation with any of them from violating 

directly or indirectly, Securities Act Section 17(a) [15 U.S.C. § 77q(a)] and Exchange Act 

Section 10(b) [15 U.S.C. §§ 78j(b)] and Rules 10b-5 [17 C.F.R. § 240.10b-5] and 15l-1 [17 

C.F.R. § 240.15l-1] thereunder; 

III.  

Ordering each of the Defendants to disgorge any ill-gotten gains obtained as a result of 

the violations alleged in the Complaint pursuant to Exchange Act Sections 21(d)(3), 21(d)(5) and 

21(d)(7) [15 U.S.C. § 78u(d)(3), (d)(5) and (d)(7)], and ordering them to pay prejudgment 

interest thereon; 

  

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IV.  

Ordering each of the Defendants to pay civil monetary penalties pursuant to Section 

20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 

U.S.C. § 78u(d)(3)]; and 

V.  

Granting such other and further relief as the Court may deem just and proper. 

JURY DEMAND 

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the Commission demands 

that this case be tried to a jury.  

 

Dated: September 28, 2023      

New York, NY 

 

 

Respectfully submitted,  

 

SECURITIES AND EXCHANGE COMMISSION 

 

 

 

____________________________ 

Antonia M. Apps 

Regional Director 

Tejal D. Shah 

Christopher J. Dunnigan 

      Alison Conn 

      Craig Welter 

Attorneys for Plaintiff 

      SECURITIES AND EXCHANGE COMMISSION 

      New York Regional Office 

      100 Pearl Street, Suite 20-100 

      New York, New York 10004 

      Phone: (212) 336-0061 (Dunnigan) 

Email: [email protected] 

 

Attorneys for Plaintiff 

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