SEC v. Chadd L. Evans, No. LR-25782, Western District of Virginia (July 19, 2023) — Press Release
raw: Chadd L. Evans
Chadd L. Evans, No. 7:23-cv-00446 (July 19, 2023)
summary
Chadd L. Evans of Virginia was charged by the SEC for a 'free-riding' scheme involving bogus transfers and consented to a final judgment including a $10,000 penalty.
paragraph
Chadd L. Evans conducted a fraudulent 'free-riding' scheme between July and October 2020 by making bogus transfers totaling over $280,000 across five brokerage firms. He utilized temporarily available funds to place nearly $1 million in trades, ultimately leaving the brokerages to absorb the resulting losses. To resolve the charges, Evans consented to a final judgment that includes a $10,000 civil penalty and permanent injunctions.
narrative
The SEC charged Chadd L. Evans of Fincastle, Virginia, with orchestrating a fraudulent 'free-riding' scheme from July 2020 to October 2020. Evans made bogus transfers exceeding $280,000 to five different brokerage firms, knowing the accounts were under-funded. He immediately traded nearly $1 million in securities using funds made temporarily available while the transfers were pending. Because the transfers failed to materialize and his trades were unprofitable, the brokerage firms were left to absorb the losses. Evans consented to a final judgment without admitting or denying the allegations, which includes a $10,000 civil penalty. He is also permanently enjoined from violating antifraud provisions and must disclose this SEC action whenever opening new brokerage accounts.
Classified financial-fraud(confidence 95%). EDGAR detection: forms 10-K/10-Q/8-K/NT 10-K· recall 67% / precision 23%. detection rule →
Parties
MONTESANO3M COMPANY
Keywords
evanschadd evanssecurities exchangebrokerageexchange commissionsecuritieschaddexchangesec'stransfersfraudulent free-ridingfree-riding schemebrokerage accountsbrokerage firmsfirms made
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 3
- $1.00M $1 million $1M–$10M
- $280K $280,000 $100K–$1M
- $10K $10,000 $10K–$100K
Entities 8
- person chadd l. evans
- person final judgment
- person Gregory Bockin
- person jack easton
- person judson mihok
- agency sec investigation
- agency Securities and Exchange Commission
- person trading losses
Triples 13
- Securities And Exchange Commission charged Chadd L. Evans of Fincastle, Virginia with conducting a fraudulent free-riding scheme
- Chadd L. Evans engaged in a pattern of making bogus transfers of money from various under-funded bank and brokerage accounts to new accounts at other broker-dealers
- Chadd L. Evans began trading securities in newly opened brokerage accounts using funds temporarily provided by brokerage firms while fraudulent transfers were pending
- Brokerages were left with trading losses
- Chadd L. Evans perpetrated the scheme at a series of five brokerage firms
- Chadd L. Evans made false deposits totaling over $280,000
- Chadd L. Evans placed nearly $1 million in trades
- Final Judgment would enjoin Chadd L. Evans from opening any brokerage account without first providing the brokerage firm with a copy of the SEC's complaint and final judgment
- Final Judgment would require Chadd L. Evans to pay a $10,000 civil penalty
- Jack Easton conducted SEC investigation
- Jack Easton was supervised by Kingdon Kase and Scott a. Thompson
- Judson Mihok assisted SEC investigation
- Gregory Bockin supervised Judson Mihok
PDF (from attached: complaint)
Text layers
Extracted body text (2,148c)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25782 / July 19, 2023 Securities and Exchange Commission v. Chadd L. Evans, No. 7:23-cv-00446 (W.D. Va. filed July 19, 2023) SEC Charges Virginia Man in Fraudulent "Free-Riding" Scheme The Securities and Exchange Commission today announced that it charged Chadd L. Evans of Fincastle, Virginia, with conducting a fraudulent "free-riding" scheme in which he attempted to profit by purchasing and selling stocks without paying for them. The SEC's complaint states that, from July 2020 to October 2020, Evans engaged in a pattern of making bogus transfers of money from various under-funded bank and brokerage accounts to new accounts at other broker-dealers, knowing that he did not have sufficient funds to cover the transfers. The complaint further alleges that Evans immediately began trading securities in the newly opened brokerage accounts using funds the brokerage firms made temporarily available while the fraudulent transfers were pending. When those transfers did not materialize, the brokerages were left with trading losses. According to the complaint, Evans perpetrated this scheme at a series of five brokerage firms, made false deposits totaling over $280,000, and placed nearly $1 million in trades. Evans's trading was not profitable, leaving the brokers with the losses he incurred on those trades. Evans, without admitting or denying the allegations in the SEC's complaint, consented to the entry of a final judgment, subject to court approval, which would permanently enjoin him from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The final judgment would also enjoin Evans from opening any brokerage account without first providing the brokerage firm with a copy of the SEC's complaint and final judgment in this matter, and would require that he pay a $10,000 civil penalty. The SEC's investigation was conducted by Jack Easton under the supervision of Kingdon Kase and Scott A. Thompson, with the assistance of trial counsel Judson Mihok under the supervision of Gregory Bockin. SEC Complaint
OCR text (2,148c · html-text · 99% conf)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25782 / July 19, 2023 Securities and Exchange Commission v. Chadd L. Evans, No. 7:23-cv-00446 (W.D. Va. filed July 19, 2023) SEC Charges Virginia Man in Fraudulent "Free-Riding" Scheme The Securities and Exchange Commission today announced that it charged Chadd L. Evans of Fincastle, Virginia, with conducting a fraudulent "free-riding" scheme in which he attempted to profit by purchasing and selling stocks without paying for them. The SEC's complaint states that, from July 2020 to October 2020, Evans engaged in a pattern of making bogus transfers of money from various under-funded bank and brokerage accounts to new accounts at other broker-dealers, knowing that he did not have sufficient funds to cover the transfers. The complaint further alleges that Evans immediately began trading securities in the newly opened brokerage accounts using funds the brokerage firms made temporarily available while the fraudulent transfers were pending. When those transfers did not materialize, the brokerages were left with trading losses. According to the complaint, Evans perpetrated this scheme at a series of five brokerage firms, made false deposits totaling over $280,000, and placed nearly $1 million in trades. Evans's trading was not profitable, leaving the brokers with the losses he incurred on those trades. Evans, without admitting or denying the allegations in the SEC's complaint, consented to the entry of a final judgment, subject to court approval, which would permanently enjoin him from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The final judgment would also enjoin Evans from opening any brokerage account without first providing the brokerage firm with a copy of the SEC's complaint and final judgment in this matter, and would require that he pay a $10,000 civil penalty. The SEC's investigation was conducted by Jack Easton under the supervision of Kingdon Kase and Scott A. Thompson, with the assistance of trial counsel Judson Mihok under the supervision of Gregory Bockin. SEC Complaint