SEC Charges Four Individuals for Long-Running Scheme to Unlawfully Trade in Advance of Numerous Follow-On Offerings

The Securities and Exchange Commission today filed fraud charges against John Lowe, Randy Grewal, Richard Ringel, and David Cooper arising from their longstanding fraudulent scheme to trade in advance of the public announcement of the timing or price, or both, of numerous follow-on offerings of NASDAQ-listed issuers. According to the SEC’s complaint, the defendants engaged in the following arrangement: Cooper, a registered representative at a broker-dealer with frequent access to material, nonpublic information about the timing or price, or both, of follow-on offerings, provided this information to Ringel, while Cooper’s colleague shared similar information with Lowe. As alleged, Lowe then provided this information to Grewal. Then, Ringel, Lowe, and Grewal and their associated entities used the information to short issuers in advance of numerous follow-on offerings before they were publicly announced, making hundreds of thousands of dollars in illicit profits. The complaint alleges that in exchange for the material, non-public information that they received, Lowe and Ringel agreed to buy shares of stock in follow-on offerings that the broker-dealer was selling, which resulted in substantial compensation for Cooper. “The defendants, several of them investment professionals, allegedly engaged in a years-long scheme to share and trade on material, nonpublic information,” said Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement. “Detecting and prosecuting illegal conduct like this, which is highly detrimental to the integrity of our securities markets, is an enduring priority for the Commission.” The U.S. Attorney’s Office for the Eastern District of New York also announced parallel criminal charges today against Cooper, Ringel, Lowe and Grewal. The SEC’s complaint charges the four individual defendants, along with entities under their control – JJL Capital LLC, Great South Bay Capital LLC, Kierland Capital LLC, and BMEN Trading LLC – with violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties. The SEC’s ongoing investigation is being conducted by Stephen Johnson, Peter Pizzani, Eric Taffet, and Alison Conn under the supervision of Tejal D. Shah, all of the New York Regional Office, with the assistance of Alex Lefferts of the SEC’s Office of Investigative and Market Analytics. The SEC’s litigation will be led by Mr. Taffet and Oren Gleich, under the supervision of Preethi Krishnamurthy. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of New York, Homeland Security Investigations, the United States Postal Inspection Service and the Financial Industry Regulatory Authority.

The Securities and Exchange Commission today filed fraud charges against John Lowe, Randy Grewal, Richard Ringel, and David Cooper arising from their longstanding fraudulent scheme to trade in advance of the public announcement of the timing or price, or both, of numerous follow-on offerings of NASDAQ-listed issuers. According to the SEC’s complaint, the defendants engaged in the following arrangement: Cooper, a registered representative at a broker-dealer with frequent access to material, nonpublic information about the timing or price, or both, of follow-on offerings, provided this information to Ringel, while Cooper’s colleague shared similar information with Lowe. As alleged, Lowe then provided this information to Grewal. Then, Ringel, Lowe, and Grewal and their associated entities used the information to short issuers in advance of numerous follow-on offerings before they were publicly announced, making hundreds of thousands of dollars in illicit profits. The complaint alleges that in exchange for the material, non-public information that they received, Lowe and Ringel agreed to buy shares of stock in follow-on offerings that the broker-dealer was selling, which resulted in substantial compensation for Cooper. “The defendants, several of them investment professionals, allegedly engaged in a years-long scheme to share and trade on material, nonpublic information,” said Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement. “Detecting and prosecuting illegal conduct like this, which is highly detrimental to the integrity of our securities markets, is an enduring priority for the Commission.” The U.S. Attorney’s Office for the Eastern District of New York also announced parallel criminal charges today against Cooper, Ringel, Lowe and Grewal. The SEC’s complaint charges the four individual defendants, along with entities under their control – JJL Capital LLC, Great South Bay Capital LLC, Kierland Capital LLC, and BMEN Trading LLC – with violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties. The SEC’s ongoing investigation is being conducted by Stephen Johnson, Peter Pizzani, Eric Taffet, and Alison Conn under the supervision of Tejal D. Shah, all of the New York Regional Office, with the assistance of Alex Lefferts of the SEC’s Office of Investigative and Market Analytics. The SEC’s litigation will be led by Mr. Taffet and Oren Gleich, under the supervision of Preethi Krishnamurthy. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of New York, Homeland Security Investigations, the United States Postal Inspection Service and the Financial Industry Regulatory Authority.