SEC v. Alan Z. Appelbaum, No. 9:22-cv-81115, Southern District of Florida (July 29, 2022) — Complaint

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

U.S. SECURITIES AND EXCHANGE
COMMISSION,

Plaintiff,
v.

ALAN Z. APPELBAUM,

Defendant.

     22-cv-_____ (____)

COMPLAINT

ECF CASE
     JURY TRIAL DEMANDED

Plaintiff U.S. Securities and Exchange Commission (the “SEC” or “Commission”) files
this Complaint against Alan Z. Appelbaum (“Appelbaum”) and alleges as follows:
SUMMARY
1. Retail investors often rely on the recommendations of broker-dealers and their
associated registered representatives when purchasing or selling securities.
1
  Registered
representatives are required to recommend only securities transactions that are suitable for their
customers,
2
 based on each customer’s characteristics, including the customer’s risk tolerance,
investment time horizons, and financial needs, among other things.  The federal securities laws

1
  A broker is “any person engaged in the business of effecting transactions in securities for the
account of others.”  Securities Exchange Act of 1934 (“Exchange Act”) Section 3(a)(4)(A) [15
U.S.C § 78c(a)(4)(A)].   A dealer is “any person engaged in the business of buying and selling
securities for his own account, through a broker or otherwise.”  Exchange Act Section 3(a)(5)(A)
[15 U.S.C. § 78c(a)(5)(A)].  A registered representative is a person that works for a broker-
dealer, sells securities to customers, and is registered with the Financial Industry Regulatory
Authority (“FINRA”), a government-authorized not-for-profit organization that oversees broker-
dealers.

2
 A “customer” is an investor who purchases securities (or other goods or services) through a
registered representative.

2

also prohibit registered representatives from purchasing or selling securities for their customers
in non-discretionary accounts
3
 without customer authorization.
2. From at least July 2017 through at least May 2019, Appelbaum – a registered
representative of Aegis Capital Corporation (“Aegis”), a New York-based broker-dealer with
offices in Florida – disregarded his obligations to his customers and repeatedly violated the
antifraud provisions of the federal securities law by making unsuitable recommendations and by
engaging in unauthorized trading.
3. Specifically, from July 2017 to May 2019, Appelbaum made over 140 unsuitable
recommendations and purchases of highly complex structured products for seven retail
customers.  Unlike conventional debt securities, these variable rate interest structured products
(“VRSPs”) that Appelbaum recommended and purchased for his customers did not pay a fixed
amount of principal at maturity.  Rather, the VRSPs had a complicated structure under which
recovery of principal at maturity was contingent upon the operation of derivative features tied to
equity indexes, such as the Standard and Poor’s 500 (“S&P 500”) or the Russell 2000 stock
market indexes.  As a result, customers could lose a portion or all of their investment, even if the
issuer of the VRSP did not default.
4. Interest payments to customers owning the VRSPs were also contingent upon the
operation of derivative features typically tied to equity indexes, as well as the spreads between
long-term and short-term United States bond yield curves.  Although the VRSPs paid a fixed
interest rate for an initial period that was typically one to three years, the VRSPs were not

3
 A non-discretionary account requires registered representative to obtain permission before
buying and selling securities in a customer’s account.

3

guaranteed to pay any interest thereafter and, in fact, sometimes did not pay any monthly or
quarterly interest.
4

5. The VRSPs, most of which had maturity periods of fifteen years or more, offered
no assurance of liquidity and typically sold in the secondary market at a significant discount to
the VRSP’s “par” value, i.e., the face value of the VRSP.
6. Despite the risky nature of these securities, Appelbaum recommended VRSPs and
purchased them for seven customers who had a “moderate” risk tolerance,
5
 were unwilling to
lose their entire invested principal, and typically had investment time horizons that were
inconsistent with the VRSP maturity dates.  Appelbaum knew, was reckless in not knowing, or
should have known that these securities were unsuitable for those customers.
7. In recommending and purchasing the unsuitable VRSPs, Appelbaum made
material misrepresentations and omissions, including by omitting the material fact that the
VRSPs were unsuitable to the financial needs and other investor characteristics of these seven
customers.  Appelbaum also falsely and misleadingly told multiple customers that the VRSPs
would pay off “at par” when the VRSPs reach maturity.  In making these material misstatements,

4
 F or example, one product sold by Appelbaum guaranteed interest for one year at a rate of 10
percent; however, interest in subsequent years would be paid only for each day that the Russell
2000 Index closed greater than or equal to 70 percent of the initial index reference value.   For
this product, the interest rate after the first year was determined based on the difference, if any,
between the 30-Year Constant Maturity Swap rate and the 2-Year Constant Maturity Swap rate,
multiplied by a leverage factor (subject to a maximum interest rate of 10 percent).  The product
did not pay monthly interest if the 2-Year Constant Maturity Swap rate was greater than or equal
to the 30-Year Constant Maturity Swap rate at the interest determination date.

5
 The new account forms signed by Aegis customers stated that “moderate risk” meant that the
customer was willing to lose “a portion” of his or her investment, not the entire investment (as
could happen with a “maximum risk” investment) and not a “substantial portion” of the
investment (as could happen with a “high risk” investment).

4

Appelbaum omitted the material fact that his customers could lose some or all of their principal
investment.
8. From September 2015 through May 2019, Appelbaum also executed hundreds of
unauthorized trades in the same seven customers’ brokerage accounts without their consent,
including trades in VRSPs that were unsuitable for those customers, and even though the
accounts were non-discretionary and required customer approval before each trade.  Appelbaum
received compensation for the vast majority of the unauthorized and unsuitable trades that he
executed,
9. As a result of these unsuitable and unauthorized VRSP trades, Appelbaum
received at least $1 million in compensation.  Some of Appelbaum’s customers, by contrast,
suffered significant losses, including one customer who lost over $1 million and another who lost
over $200,000 as a result of Appelbaum’s unsuitable and unauthorized VRSP trades in their
accounts.
VIOLATIONS
10. By virtue of the conduct alleged herein, Appelbaum, directly or indirectly, singly
or in concert, violated and is otherwise liable for violations of Section 17(a) of the Securities Act
of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)]; and Section 10(b) of the Exchange Act [15
U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
11.  Unless Appelbaum, who continues to hold licenses allowing him to be employed
as a registered representative with a broker-dealer, is permanently restrained and enjoined, he
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.

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JURISDICTION AND VENUE
12. 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 2l(d)(l) of the Exchange Act [15
U.S.C. § 78u(d)(l)], seeking a final judgment: (1) restraining and permanently enjoining
Appelbaum from engaging in the acts, practices,  and courses of business alleged against him
herein pursuant to Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Section 21(d)(1)
[15 U.S.C. § 78u(d)(1)] of the Exchange Act; (b) ordering Appelbaum to disgorge all ill-gotten
gains and to pay prejudgment interest on those amounts pursuant to Sections 21(d)(5) and
21(d)(7) of the Exchange Act [15 U.S.C. § 78u(d)(5) and (d)(7)]; and (c) imposing civil money
penalties on Appelbaum 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)].
13. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331, 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].
14. In connection with the conduct alleged in this Complaint, Appelbaum, directly or
indirectly, singly or in concert with others, made use of means or instrumentalities of
transportation or communication in interstate commerce, or the mails, or the facilities of a
national securities exchange, including through Appelbaum’s use of telephone communications
and the Internet when executing the transactions at issue in this case.
15. Venue lies in the Southern District of Florida pursuant to 28 U.S.C. § 1391(b)(1)
and (2), 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 this District, and were effected, directly or indirectly,

6

by making use of means or instrumentalities of transportation or communication in interstate
commerce, or the mails, or the facilities of a national securities exchange.  Specifically, during
the relevant time period, Appelbaum resided in this District and conducted business at an Aegis
branch office located in this District.
DEFENDANT
16. Alan Z. Appelbaum, age 75, resides in Boca Raton, Florida.  From July 2015 to
May 2021, Appelbaum was employed as a registered representative by Aegis at its branch office
in Boca Raton, Florida.  In addition to being a registered representative, Appelbaum was a
Managing Director of Aegis and headed the firm’s Municipal Bond Desk from approximately
August 2015 to September 2018, after which time he became co-head of the firm’s Fixed Income
Desk until his departure from the firm.
17. Appelbaum has a lengthy disciplinary history in the securities industry.  At least
14 of Appelbaum’s customers have filed FINRA or National Association of Securities Dealers
Association (“NASD”)
6
 arbitration claims or customer complaints against him.  Eleven of the
claims and complaints were settled through a payment to the customers and another resulted in
an NASD arbitration panel finding Appelbaum liable for, among other things, unsuitable
securities trading and ordering him to pay compensatory damages.
18. Appelbaum has also been the subject of disciplinary actions by the SEC and other
regulatory authorities.  In February 1982, the SEC censured Appelbaum for aiding and abetting
his previous employer’s violations of Section 17(a) of the Exchange Act and Exchange Act Rule
17a-3, among other violations.  In July 2006, the State of New Hampshire’s Bureau of Securities
Regulation obtained a cease-and-desist order against Appelbaum and fined him for servicing the

6
 The NASD was a predecessor to FINRA.

7

brokerage accounts of New Hampshire residents while not licensed to sell securities in New
Hampshire.  And in July 1991, the NASD fined and censured Appelbaum for, among other
things, effecting securities transactions while failing to maintain required minimum net capital.
19. Appelbaum resigned from Aegis in May 2021 for failing to follow the firm’s
procedures and for engaging in unauthorized trading.  Appelbaum is not currently registered with
a broker-dealer, but he continues to hold FINRA Series 4, 7, 12, 24, 27, 53, and 63 licenses.
RELATED ENTITY
20. Aegis Capital Corporation is a New York corporation with its main office in
New York, New York and over 20 branch offices nationwide, including six branch offices in
Florida.  During the relevant time period, Appelbaum worked at an Aegis branch office in Boca
Raton, Florida that Aegis recently closed.  Aegis has been registered with the Commission as a
broker-dealer since 1984 and as an investment adviser since 2010.
FACTUAL ALLEGATIONS
Appelbaum Made Customer-Specific
Recommendations That Were Unsuitable

21.  As a registered representative, Appelbaum was required to make customer-
specific suitability determinations for securities transactions that he recommended.  In particular,
he had a duty to determine that the securities that he recommended to his customers were
suitable for those customers in light of their financial needs, investment objectives, risk
tolerance, investment time horizons, and other circumstances.
22. This obligation was incorporated into Aegis’s Written Supervisory Procedures
(“WSPs”).  For example, Aegis’s WSPs required its registered representatives to comply with the
customer-specific suitability requirements set forth in FINRA Rule 2111.  Under FINRA Rule
2111, registered representatives are required to recommend purchases of securities that are

8

suitable for the customer, based on the customer’s investment profile, which includes the
customer’s age, financial situation and needs, tax status, investment objectives, investment
experience, investment time horizon, liquidity needs, risk tolerance, other investments, and any
other information the customer may disclose to the member or associated person in connection
with such recommendation.
23. Appelbaum knew that he was required to make customer-specific suitability
determinations and to recommend securities that were suitable for his customers.  In fact,
Appelbaum testified that brokers who are not aware of these requirements “don’t belong in the
business.”
24. Aegis’s WSPs also stated that complex products like VRSPs “warrant particular
care in how they are scrutinized and sold to customers.”  In particular, Aegis’s WSPs stated that
registered representatives, including Appelbaum, were required to consider the “extent and
limitation of any principal protection” of complex products like VRSPs in order to “make suitable
recommendations” to customers.
25. In July 2017, Aegis established firm-wide procedures specific to structured
products (the “July 2017 Policy”) that limited the sale of structured products, such as VRSPs, to
only those customers with “high” or “maximum” risk tolerances.
7

26. Appelbaum recommended and purchased VRSPs for seven customers who – as
Appelbaum knew, was reckless in not knowing, or should have known –  had a “moderate” risk
tolerance and who were unwilling to risk losing their entire investment.  These recommendations
were unsuitable for these customers because, among other reasons, (1) the VRSPs lacked any

7
  The customer’s risk tolerances were described in account opening forms signed by the
customers.

9

principal protection at maturity and had complex structures that made recovery of principal at
maturity contingent upon the performances of one or more equity indexes; (2) VRSP interest
payments after an initial period were typically contingent upon the performance of equity
index(es) and the spreads between long-term and short-term United States bond yield curves; and
(3) the VRSPs typically had maturity dates inconsistent with the seven customers’ investment
time horizons and sold in the secondary market at significant discounts.
27. In addition to making unsuitable recommendations and violating the July 2017
Policy, Appelbaum also failed to comply with other Aegis procedures aimed at ensuring that
registered representatives disclosed to customers, and that customers understood the risks of
structured products like VRSPs to customers.
28. Specifically, from at least July 2017 through at least May 2019, Aegis required its
registered representatives to provide a “Structured Products Disclosure” form (“Disclosure
Form”) to each customer when recommending the purchase of structured products such as
VRSPs.  The Disclosure Form notified customers that structured products offered “no guarantee
of any specific return on the principal amount or the repayment of all or a portion of the principal
amount” and that such products “may not be liquid.”  The Disclosure Form also provided a link
to a January 2015 SEC “Investor Bulletin” on structured notes such as VRSPs.  That investor
bulletin stated, among other things, that structured notes “can be very complex and have
significant investment risks” and warned that “[b]efore investing in structured notes, you should
understand how the notes work and carefully consider their risks.”  The D isclosure Form further
required customers to sign and return the form and to accept the terms and conditions set forth in
the form.

10

29. After the July 2017 Policy became effective, Appelbaum did not provide the
Disclosure Form to any of the seven customers before he started purchasing VRSPs in their
accounts.  In fact, Appelbaum did not provide the Forms to any of the customers for nearly two
years after Aegis enacted the July 2017 Policy.
30. Appelbaum also failed to sign a “Structured Product Attestation” forms
(“Attestation Forms”) for the VRSP purchases for the seven customers during the relevant
period, again in violation of Aegis policy.  The Attestation Forms required registered
representatives like Appelbaum to attest to, among other things, that the registered representative
informed customers of the potential illiquidity and “market risk” of the structured products.
31. Appelbaum did not comply with Aegis’s structured products procedures –
including the July 2017 Policy and the policies relating to the Disclosure and Attestation Forms –
even though the VRSPs that he recommended and purchased for the seven customers were
structured products as defined in Aegis’s procedures and all of these procedures therefore
applied to them.
8

32. Appelbaum further failed to take Aegis’s mandatory training regarding the sale of
structured products, which warned registered representatives to “not guarantee anything, because
markets might not cooperate.”
33. In total, Appelbaum purchased over 140 VRSPs for the seven customers from
July 2017 through May 2019.  He knew, was reckless in not knowing, or should have known that
these VRSPs were unsuitable for these customers in light of their investment profiles, including

8
 As Appelbaum stated in testimony, the VRSPs are “part of the structured products
classification.”  Aegis’s structured products procedures applied to sales of all VRSPs, including
those purchased at issuance and those purchased in the secondary market.

11

their financial needs, risk tolerance, investment time horizons, and other circumstances, as
further described below.  The unsuitable VRSPs that Appelbaum recommended, including the
Committee on Uniform Securities Identification Procedures (“CUSIP”) number for each VRSP
at issue, are summarized in Exhibit 1 to this Complaint.
34. Customers 1 and 2:  Customers 1 and 2 are trusts owned by a husband and wife,
ages 82 and 80
9
 respectively.  The husband and wife each had a “moderate” risk tolerance, were
unwilling to lose their entire invested principal, and had investment time horizons of 9-11 years.
From July 2017 through March 2018, Appelbaum purchased at least 21 VRSPs for Customers 1
and 2, all of which had maturity dates that were 15 years or more from the date of purchase,
including VRSP purchases that Appelbaum made without the authorization of Customer 1 and
Customer 2.  Appelbaum knew, was reckless in not knowing, or should have known that the
VRSPs were unsuitable for Customers 1 and 2 based on their “moderate” risk tolerance,
unwillingness to lose their entire invested principal, investment time horizons of 9-11 years that
were inconsistent with the VRSPs, and their respective ages.
10

35. Customer 3:  Customer 3 is a trust owned by a widow, age 89, with a “moderate”
risk tolerance, who was unwilling to lose her entire invested principal,  and had a 1-3 year
investment time horizon.  From July 2017 through April 2018, Appelbaum purchased at least 16
VRSPs for Customer 3, all of which had maturity dates that were 10 years or more from the date

9
 The listed ages are the customers’ current ages, not the ages when Appelbaum purchased the
VRSPs for the customers.

10
 Customers 1 and 2 filed a FINRA complaint against Appelbaum stating that the VRSPs that he
purchased in their accounts were “not suitable” to their financial needs and, along with
Appelbaum’s practice of “regularly placing trades in [Customer 1’s and 2’s] accounts without
consent,” caused them “several hundred thousand dollars” in losses.

12

of purchase (usually 15 years), including VRSP purchases that he made without Customer 3’s
authorization.  Appelbaum knew, was reckless in not knowing, or should have known that the
VRSPs were unsuitable for Customer 3 based on the Customer 3’s “moderate” risk tolerance, her
unwillingness to lose her entire invested principal, an investment horizon of 1-3 years that was
inconsistent with the VRSPs, and the age of Customer 3’s owner.  Customer 3 suffered at least
$200,000 in losses as a result of Appelbaum’s unsuitable recommendations discussed herein and
the unauthorized trading detailed below.
11

36. Customers 4 and 5:  Customers 4 and 5 are trusts owned by a husband age 86 and
wife age 83.  The husband and wife each had “moderate” risk profiles, were unwilling to lose
their entire invested principal, and had a 9-11 year investment horizon.  From at least July 2017
through at least April 2019, Appelbaum purchased at least 56 VRSPs for Customers 4 and 5, all
of which had maturity dates that were 15 years or more from the date of purchase, including
VRSP purchases that Appelbaum made without Customers 4’s and 5’s authorization.
Appelbaum knew, was reckless in not knowing, or should have known that the VRSPs were
unsuitable for Customers 4 and 5 based on their “moderate” risk tolerance, unwillingness to lose
their entire invested principal, the age of Customer 4 and 5’s owner, and their 9-11 years
investment time horizons.
37. Customer 6:  Customer 6, age 61, had a “moderate” risk profile, was unwilling to
lose her entire invested principal, and had an investment horizon of 9-11 years, with a typical
investment holding period of 1-3 years.  From July 2017 through June 2018, Appelbaum

11
 Customer 3 filed a FINRA arbitration claim against Appelbaum stating that the VRSPs that
Appelbaum purchased were unsuitable in light of her age and risk tolerance, among other
reasons.  Customer 3’s FINRA complaint was settled through a payment of $280,000 to
Customer 3.

13

purchased at least nine VRSPs for Customer 6, all of which had maturity dates that were 10 years
or more from the date of purchase (usually 15 years).  When he made these purchases,
Appelbaum knew or was reckless in not knowing that the VRSPs were unsuitable for Customer 6
based on her “moderate” risk tolerance, unwillingness to lose her entire invested principal, and
her investment time horizon.
38. Customer 7:  Customer 7, a single-member LLC owned by a woman age 58, had a
“moderate” risk profile and was unwilling to lose the entire invested principal.  From July 2017
through April 2019, Appelbaum purchased at least 44 VRSPs for Customer 7, the majority of
which had maturity dates of 15 years or more, including VRSP purchases that he made without
Customer 7’s authorization.  Appelbaum knew, was reckless in not knowing, or should have
known that the VRSPs were unsuitable based on Customer 7’s “moderate” risk tolerance and
unwillingness to lose her entire invested principal.  Customer 7 suffered at least $1 million in
losses as a result of Appelbaum’s unsuitable recommendations discussed herein and the
unauthorized trading detailed below.
12

Appelbaum Made Material Misrepresentations and Omissions
to His Customers Including Material Omissions Regarding Suitability

39. Appelbaum made materially false and misleading statements regarding the
VRSPs when recommending and purchasing the VRSPs for his customers.
40. First, Appelbaum knew, was reckless in not knowing, or should have known that
the VRSPs were not suitable for the seven customers described above, but he omitted that

12
  Customer 7’s owner filed a FINRA arbitration claim against Appelbaum stating that the
VRSPs that he purchased were not suitable for Customer 7’s financial needs and that Appelbaum
had traded in VRSPs in Customer 7’s account without authorization.  Customer 7’s FINRA
arbitration claim was settled through a $1.65 million payment to Customer 7.

14

material fact when he recommended the VRSPs to those customers and when he purchased
VRSPs in their accounts (often without authorization, as discussed in further detail below).
Among other things, Appelbaum recommended the transactions, but failed to disclose that the
VRSPs were unsuitable for customers with a “moderate” risk tolerance or those who were
unwilling to risk losing their entire invested principal, like the seven customers.
41. A reasonable investor would have wanted to know that the VRSPs were not
suitable for the seven customers given their financial needs, or would have found that
information important to their investment decision.  In fact, multiple customers have stated that
they would not have invested in VRSPs if they had known that VRSPs were not suitable for their
financial needs, risk tolerance, investment time horizons, and other characteristics.
42. Appelbaum also made material misrepresentations to certain customers regarding
the VRSPs, knowing that his customers relied upon him for information about the VRSPs, and so
that these customers would not close their accounts, allowing Appelbaum to continue making
VRSP purchases in those accounts.
13

43. For example, Appelbaum falsely told the owner of Customer 7 that he was
investing her money in conservative bonds.  Specifically, when investing with Appelbaum,

13
 Appelbaum testified that he did not provide prospectuses to customers for whom he purchased
VRSPs in the secondary market (which made up a significant portion of the unsuitable VRSP
trades at issue).  He further testified that he did not provide prospectuses to customers purchasing
newly issued VRSPs before he made those purchases on their behalf.  Instead, as Appelbaum
testified, his customers “rely [ ] on me.”  The prospectuses typically outlined the risks associated
with the VRSPs.  For example, VRSP prospectuses typically stated that the VRSP was a
“principal-at-risk” security and that customers could lose some or all of their invested principal if
certain referenced assets, such as the S&P 500, did not perform above certain pre-determined
ranges at maturity.  Prospectuses also typically expressly warned, “There is no minimum
payment at maturity.  Accordingly, investors may lose up to their entire initial investment in the
securities.”  The prospectuses also typically stated that “it is possible you will receive little or no
interest on the securities” after the initial teaser period.

15

Customer 7’s owner advised Appelbaum that she was only interested in conservative
investments.  Appelbaum assured Customer 7’s owner that he would purchase “boring bonds” so
that Customer 7’s owner would have “guaranteed income” for her retirement.  Customer 7 wired
money to Appelbaum to invest only after Appelbaum provided these assurances.  But instead of
buying bonds that would provide guaranteed income for Customer 7, Appelbaum used much of
the money to purchase VRSPs, which were not “boring bonds,” but rather highly complex
structured products that had the potential to lose their entire principal depending on the
performance of equity indexes, as well as the potential to not pay interest after an initial period
that often depended on the performance of equity indexes and Treasury yield curves.
Appelbaum also did not provide Customer 7 with any prospectus that outlined the risks of the
VRSPs, particularly the risk that the VRSPs could lose principal and not pay interest.
44. In December 2018, Customer 7’s owner learned that what she believed to be
investments in conservative bonds were losing significant market value.  She emailed
Appelbaum that her husband had “freaked out” when learning of the losses and asked
Appelbaum to confirm how a substantial portion of Customer 7’s nearly $12 million investment
with Appelbaum had been lost.
45. On January 19, 2019, Appelbaum responded by falsely stating that “these bonds
will pay off at over 12 million” at maturity and “that is not including the interest you will receive
during this time.”  In fact, a significant portion of Customer 7’s $12 million was not invested in
conservative bonds, but rather in complex and risky VRSPs.  Appelbaum also stated that, given
the “destruction of the stock market over the past couple weeks,” the bonds he had supposedly
purchased for Customer 7 were a particularly good investment, concealing the material fact that

16

the VRSPs’ value – and their payment of interest – was actually linked to the very stock market
that he said was being “destr[oyed].”
46. Appelbaum also misleadingly stated in that same communication that Customer 7
was guaranteed to receive her principal (“par”) at maturity:
[Customer 7’s owner], bonds go up and down, much like stocks.
But one of the reasons we buy bonds, is eventually they go back to
par (100).  In other words, in your case back to 12 million+.  That
isn’t the case with stocks.  Bonds will have more good and bad
years ahead, but [Customer 7’s owner’s husband] is looking at a
‘snapshot’ in time and yes 2018 was not a good year, but we are
building something not for today but for your retirement.  And
even if your retirement starts in the next couple of years, you will
generate enough income along the way to pay for the retirement as
well as having your bonds go to over 12 million dollars at maturity

(Emphasis added.)

47. Appelbaum’s statements were false and misleading because the VRSPs were not
guaranteed to go “back to par.”  Instead, unlike traditional debt securities like municipal or
corporate bonds, their value at maturity was dependent on one or more stock market indexes.
48. After Appelbaum made these false and misleading statements in January 2019,
Customer 7 kept a brokerage account with Appelbaum and he continued to purchase unsuitable
VRSPs in Customer 7’s account.
49. In March 2019, Customer 7’s owner again emailed Appelbaum to ask about
losses associated with VRSPs.  Appelbaum responded that he was on vacation and that he would
call Customer 7’s owner, but he assured her that the losses were “not a significant item.”
50. After Appelbaum made the false and misleading statement that losses in
Customer 7’s account was not a “significant item,” Customer 7 kept a brokerage account with
Appelbaum and he continued to purchase unsuitable VRSPs in Customer 7’s account.

17

51. Ultimately, Appelbaum apologized to Customer 7’s owner for purchasing the
VRSPs for Customer 7 and asked for six months to “make it better.”  Customer 7’s owner
severed her relationship with Appelbaum and filed a FINRA arbitration claim against him.
14

52. Appelbaum made similar false and misleading statements to other customers.  In
or around May 2018, Customer 3’s owner (who was in her mid-80s at the time) asked
Appelbaum to provide the market value of all VRSPs that Appelbaum had purchased for
Customer 3, as she had noted that those market values had significantly decreased from their
“par” value.  Customer 3’s owner conveyed her request to Appelbaum through her son.
Appelbaum’s assistant responded with the market value of the Customer 3’s portfolio, which was
heavily concentrated in VRSPs and showed significant losses.  Less than 10 minutes later, the
son responded to Appelbaum that Customer 3’s owner “directs that you stop trading until she’s
had a chance to review the account.”  The following day, the son wrote an email to Appelbaum
advising that Customer 3’s owner had requested that Appelbaum “sell the structured notes and
obtain the best achievable price.”  Appelbaum responded by falsely stating that the $1.7 million
owned by Customer 3, much of which was invested in VRSPs, “will appreciate to a par value of
$2,044,000 at maturity.”  But as Appelbaum knew, was reckless in not knowing, or should have
known, the VRSPs that Customer 3 owned were not principal protected and thus were not
guaranteed to “appreciate to a par value.”  In testimony, Appelbaum admitted that he had made

14
 The FINRA arbitration against Appelbaum, which was settled through a $1.65 million
payment to Customer 7, alleged that Appelbaum’s VRSP trades were unauthorized and
unsuitable, and that Appelbaum made material misstatements and omissions.

18

this statement based on “an assumption that the non-principal protected notes would also pay off
even though they’re not protected[.]”
15

53. Appelbaum made similar misrepresentations to Customers 1 and 2, trusts owned
by a husband and wife both in their 80s.  The owners of Customers 1 and 2 told Appelbaum that
they wanted to maximize income but did not want to lose principal.  Nonetheless, Appelbaum
purchased over 20 VRSPs that were not guaranteed to repay any principal at maturity or any
interest after an initial teaser period.  When Customers 1 and 2 confronted Appelbaum about
losses in their account, Appelbaum falsely stated that the “value [Customer 1 and 2] see on the
statements is not the real value” and told them that they should not worry about the principal loss
on paper.  He concealed the material fact that the VRSPs might not repay any principal at
maturity depending on the performance of certain stock market indexes.
Appelbaum Engaged In Fraudulent Unauthorized Trading
54. All of the accounts managed by Appelbaum were non-discretionary, meaning that
he was required to seek and obtain customer authorization prior to each and every transaction in
those accounts.  As Appelbaum testified, “I’ve never opened a discretionary account . . . I don’t
have discretionary accounts.”  Appelbaum further testified that he never even had “limited
authorization” over any of his customers’ accounts.
55. Appelbaum knew that Aegis had a policy that prohibited unauthorized trading and
that obtaining authorization before any trade was “the way you’re supposed to do it.”  As he
testified, Aegis policy “requires [ ] that a broker speak to a client before putting an order in for
that client” for any non-discretionary accounts, including all of his customers’ accounts.

15
 As noted above, in 2021, Customer 3’s owner filed a FINRA complaint against Appelbaum,
alleging, among other things, that Appelbaum made material misrepresentations and unsuitable
recommendations.

19

56. Appelbaum further testified that “as a matter of practice” the authorization was
“usually minutes to hours” before a trade, but that he believed that he had “ a 24 hour window to
be able to take an order and then fill it.”  Appelbaum testified that he knew that he was required
to obtain the following authorization from each of his customers 24 hours before a trade:
Q.   What, if any, term of a trade does the broker need to obtain
authorization for within the 24-hour window that you just
mentioned?

A. Well, certainly the name of the security, all of its most
important elements. In the case of - because I do almost all
in bonds the interest rate, the maturity date, the price, the
yield, if there's any call features, any yield to the call, all
the pertinent facts necessary for a client to make a decision,
which I, sort of, included, I think, most of them.

Q.  Is it your understanding that a broker needs to obtain the
quantity of securities traded?

A. Of course the -- yes. I left that out. Of course the quantity.

57. Appelbaum testified that he typically obtained authorization from his customers
through a phone call with the customers.  Appelbaum further testified that “I do almost all of my
business over the phone,” so customer authorizations would have been over the phone.  As a
result, any customer authorizations that Appelbaum obtained would have been through a phone
call between Appelbaum and each customer.
58. Multiple customers have stated that Appelbaum did not obtain authorization
before purchasing and selling VRSPs in their accounts.  Four customers (Customers 1, 2, 3, and
7) also filed FINRA complaints against Appelbaum for unauthorized trading and for trading
using his own discretion in their accounts.
59. An analysis of Appelbaum’s personal cell phone record and a summary of phone
calls provided by Aegis to the SEC, compared with the phone numbers of the seven customers,

20

shows hundreds of VRSP transactions in the customers’ accounts from August 2015 through
May 2019 where Appelbaum did not contact the customer to obtain authorization prior to the
transaction.  The results of that analysis, which excludes any trades that were placed seven days
or less before or after a phone call between Appelbaum and the customers,  is attached as Exhibit
2.
60. Appelbaum engaged in the unauthorized trading even though he knew, or was
reckless in not knowing, that the practice was prohibited by law and by Aegis policy.   In those
trades, Appelbaum purchased and sold VRSPs in the accounts of customers for whom VRSPs
were unsuitable and to whom he had made material misrepresentations and omissions regarding
VRSPs.
61. On the vast majority of unauthorized trades set forth in Exhibit 2, Appelbaum
earned compensation.
62. Appelbaum admitted that he engaged in unauthorized trading in sworn testimony:
Q. So there were sometimes where you did not g[e]t
authorization before making a trade; is that correct?

A.  Look, I am sure through the years there were a few times
that it happened. I can’t say ever.  “Always” is a tough
word to say. Okay?  So if you're going to put me in a box,
I'll say yes, I have done it, but that was not my practice.

This Action is Timely Filed

63.  Appelbaum entered into agreements with the SEC in which he agreed to toll, for
various periods and various lengths of time, any statute of limitations applicable to the conduct
and claims alleged herein.  Defendant’s tolling agreements cover the period between December
10, 2019 through July 30, 2021.

21

FIRST CLAIM FOR RELIEF
Violations of Section 17(a) of the Securities Act

64. The Commission realleges and incorporates by reference herein each and every
allegation contained in paragraphs 1 through 63, as if fully set forth herein.
65. Defendant, 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, has: (a) knowingly or recklessly employed devices,
schemes, or artifices to defraud; (b) knowingly, recklessly, or negligently obtained money or
property by means of untrue statements of a material fact or omissions of a material fact
necessary in order to make the statement made, in light of the circumstances under which they
were made, not misleading; and/or (c) knowingly, recklessly, or negligently 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.
66. By reason of the foregoing, the Defendant, directly or indirectly, singly or in
concert, has violated, and unless enjoined, will again violate Section 17(a) of the Securities Act
[15 U.S.C. § 77q(a)].
SECOND CLAIM FOR RELIEF
Violation of Section 10(b) of the Exchange Act and Rule 10b-5

67. The Commission realleges and incorporates by reference herein each and every
allegation contained in paragraphs 1 through 63, as if fully set forth herein.
68. Defendant, directly or indirectly, acting intentionally, knowingly or recklessly,
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, has: (a) employed devices, schemes, or artifices to defraud; (b) made untrue

22

statements of a material fact or omitted to state a material fact necessary in order to make the
statement made, in light of the circumstances under which they were made, not misleading;
and/or (c) engaged in acts, transactions, practices, or courses of business which operated or
would operate as a fraud or deceit upon other persons.
69. By reason of the foregoing, Defendant, directly or indirectly, singly or in concert,
has violated, and unless enjoined, will again violate Section 10(b) of the Exchange Act [15
U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court enter a Final
Judgment:
I.
Permanently enjoining the Defendant from committing, aiding and abetting, or otherwise
engaging in conduct that would make him liable for the violations of the federal securities laws
alleged in this Complaint.  See Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)]; Section
21(d)(1) of the Exchange Act [15 U.S.C. § 78u(d)(1)].
II.
Ordering the Defendant to disgorge any ill-gotten gains and to pay prejudgment interest
thereon.  See Sections 21(d)(5) and 21(d)(7) of the Exchange Act [15 U.S.C. § 78u(d)(5) and
(d)(7)].
III.
Ordering the Defendant to pay a civil monetary penalty.  See 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)].

23

IV.
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, Plaintiff demands trial by
jury in this action of all issues so triable.

Dated:  July 28, 2022     Respectfully submitted,

      /s/ James P. Connor
      James P. Connor
      Eugene N. Hansen
      U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Tel: (202) 551-8394
      Email: [email protected]
Attorneys for Plaintiff

Of counsel:
Yuri B. Zelinsky
Anik A. Shah
100 F Street, NE
Washington, DC 20549

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF FLORIDA 

  
 
U.S. SECURITIES AND EXCHANGE 
COMMISSION, 
 

Plaintiff,    
v. 
 

ALAN Z. APPELBAUM,   
 

Defendant. 

 
 
 
     22-cv-_____ (____) 

 
 
COMPLAINT 
  
ECF CASE 

     JURY TRIAL DEMANDED 
 
 

 
Plaintiff U.S. Securities and Exchange Commission (the “SEC” or “Commission”) files 

this Complaint against Alan Z. Appelbaum (“Appelbaum”) and alleges as follows: 

SUMMARY 

1. Retail investors often rely on the recommendations of broker-dealers and their 

associated registered representatives when purchasing or selling securities.1  Registered 

representatives are required to recommend only securities transactions that are suitable for their 

customers,2 based on each customer’s characteristics, including the customer’s risk tolerance, 

investment time horizons, and financial needs, among other things.  The federal securities laws 

                     
1  A broker is “any person engaged in the business of effecting transactions in securities for the 
account of others.”  Securities Exchange Act of 1934 (“Exchange Act”) Section 3(a)(4)(A) [15 
U.S.C § 78c(a)(4)(A)].  A dealer is “any person engaged in the business of buying and selling 
securities for his own account, through a broker or otherwise.”  Exchange Act Section 3(a)(5)(A) 
[15 U.S.C. § 78c(a)(5)(A)].  A registered representative is a person that works for a broker-
dealer, sells securities to customers, and is registered with the Financial Industry Regulatory 
Authority (“FINRA”), a government-authorized not-for-profit organization that oversees broker-
dealers. 

  
2 A “customer” is an investor who purchases securities (or other goods or services) through a 
registered representative.   

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2 
 

also prohibit registered representatives from purchasing or selling securities for their customers 

in non-discretionary accounts3 without customer authorization.   

2. From at least July 2017 through at least May 2019, Appelbaum – a registered 

representative of Aegis Capital Corporation (“Aegis”), a New York-based broker-dealer with 

offices in Florida – disregarded his obligations to his customers and repeatedly violated the 

antifraud provisions of the federal securities law by making unsuitable recommendations and by 

engaging in unauthorized trading.   

3. Specifically, from July 2017 to May 2019, Appelbaum made over 140 unsuitable 

recommendations and purchases of highly complex structured products for seven retail 

customers.  Unlike conventional debt securities, these variable rate interest structured products 

(“VRSPs”) that Appelbaum recommended and purchased for his customers did not pay a fixed 

amount of principal at maturity.  Rather, the VRSPs had a complicated structure under which 

recovery of principal at maturity was contingent upon the operation of derivative features tied to 

equity indexes, such as the Standard and Poor’s 500 (“S&P 500”) or the Russell 2000 stock 

market indexes.  As a result, customers could lose a portion or all of their investment, even if the 

issuer of the VRSP did not default.   

4. Interest payments to customers owning the VRSPs were also contingent upon the 

operation of derivative features typically tied to equity indexes, as well as the spreads between 

long-term and short-term United States bond yield curves.  Although the VRSPs paid a fixed 

interest rate for an initial period that was typically one to three years, the VRSPs were not 

                     
3 A non-discretionary account requires registered representative to obtain permission before 
buying and selling securities in a customer’s account. 
 

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3 
 

guaranteed to pay any interest thereafter and, in fact, sometimes did not pay any monthly or 

quarterly interest.4    

5. The VRSPs, most of which had maturity periods of fifteen years or more, offered 

no assurance of liquidity and typically sold in the secondary market at a significant discount to 

the VRSP’s “par” value, i.e., the face value of the VRSP.     

6. Despite the risky nature of these securities, Appelbaum recommended VRSPs and 

purchased them for seven customers who had a “moderate” risk tolerance,5 were unwilling to 

lose their entire invested principal, and typically had investment time horizons that were 

inconsistent with the VRSP maturity dates.  Appelbaum knew, was reckless in not knowing, or 

should have known that these securities were unsuitable for those customers.   

7. In recommending and purchasing the unsuitable VRSPs, Appelbaum made 

material misrepresentations and omissions, including by omitting the material fact that the 

VRSPs were unsuitable to the financial needs and other investor characteristics of these seven 

customers.  Appelbaum also falsely and misleadingly told multiple customers that the VRSPs 

would pay off “at par” when the VRSPs reach maturity.  In making these material misstatements, 

                     
4 For example, one product sold by Appelbaum guaranteed interest for one year at a rate of 10 
percent; however, interest in subsequent years would be paid only for each day that the Russell 
2000 Index closed greater than or equal to 70 percent of the initial index reference value.  For 
this product, the interest rate after the first year was determined based on the difference, if any, 
between the 30-Year Constant Maturity Swap rate and the 2-Year Constant Maturity Swap rate, 
multiplied by a leverage factor (subject to a maximum interest rate of 10 percent).  The product 
did not pay monthly interest if the 2-Year Constant Maturity Swap rate was greater than or equal 
to the 30-Year Constant Maturity Swap rate at the interest determination date. 
 
5 The new account forms signed by Aegis customers stated that “moderate risk” meant that the 
customer was willing to lose “a portion” of his or her investment, not the entire investment (as 
could happen with a “maximum risk” investment) and not a “substantial portion” of the 
investment (as could happen with a “high risk” investment).    
 

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4 
 

Appelbaum omitted the material fact that his customers could lose some or all of their principal 

investment.   

8. From September 2015 through May 2019, Appelbaum also executed hundreds of 

unauthorized trades in the same seven customers’ brokerage accounts without their consent, 

including trades in VRSPs that were unsuitable for those customers, and even though the 

accounts were non-discretionary and required customer approval before each trade.  Appelbaum 

received compensation for the vast majority of the unauthorized and unsuitable trades that he 

executed, 

9. As a result of these unsuitable and unauthorized VRSP trades, Appelbaum 

received at least $1 million in compensation.  Some of Appelbaum’s customers, by contrast, 

suffered significant losses, including one customer who lost over $1 million and another who lost 

over $200,000 as a result of Appelbaum’s unsuitable and unauthorized VRSP trades in their 

accounts.   

VIOLATIONS 

10. By virtue of the conduct alleged herein, Appelbaum, directly or indirectly, singly 

or in concert, violated and is otherwise liable for violations of Section 17(a) of the Securities Act 

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

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

11.  Unless Appelbaum, who continues to hold licenses allowing him to be employed 

as a registered representative with a broker-dealer, is permanently restrained and enjoined, he 

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. 

   

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5 
 

JURISDICTION AND VENUE 

12. 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 2l(d)(l) of the Exchange Act [15 

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

Appelbaum from engaging in the acts, practices, and courses of business alleged against him 

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

[15 U.S.C. § 78u(d)(1)] of the Exchange Act; (b) ordering Appelbaum to disgorge all ill-gotten 

gains and to pay prejudgment interest on those amounts pursuant to Sections 21(d)(5) and 

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

penalties on Appelbaum 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)]. 

13. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331, 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].   

14. In connection with the conduct alleged in this Complaint, Appelbaum, directly or 

indirectly, singly or in concert with others, made use of means or instrumentalities of 

transportation or communication in interstate commerce, or the mails, or the facilities of a 

national securities exchange, including through Appelbaum’s use of telephone communications 

and the Internet when executing the transactions at issue in this case. 

15. Venue lies in the Southern District of Florida pursuant to 28 U.S.C. § 1391(b)(1) 

and (2), 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 this District, and were effected, directly or indirectly, 

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6 
 

by making use of means or instrumentalities of transportation or communication in interstate 

commerce, or the mails, or the facilities of a national securities exchange.  Specifically, during 

the relevant time period, Appelbaum resided in this District and conducted business at an Aegis 

branch office located in this District.   

DEFENDANT  

16. Alan Z. Appelbaum, age 75, resides in Boca Raton, Florida.  From July 2015 to 

May 2021, Appelbaum was employed as a registered representative by Aegis at its branch office 

in Boca Raton, Florida.  In addition to being a registered representative, Appelbaum was a 

Managing Director of Aegis and headed the firm’s Municipal Bond Desk from approximately 

August 2015 to September 2018, after which time he became co-head of the firm’s Fixed Income 

Desk until his departure from the firm.   

17. Appelbaum has a lengthy disciplinary history in the securities industry.  At least 

14 of Appelbaum’s customers have filed FINRA or National Association of Securities Dealers 

Association (“NASD”)6 arbitration claims or customer complaints against him.  Eleven of the 

claims and complaints were settled through a payment to the customers and another resulted in 

an NASD arbitration panel finding Appelbaum liable for, among other things, unsuitable 

securities trading and ordering him to pay compensatory damages.   

18. Appelbaum has also been the subject of disciplinary actions by the SEC and other 

regulatory authorities.  In February 1982, the SEC censured Appelbaum for aiding and abetting 

his previous employer’s violations of Section 17(a) of the Exchange Act and Exchange Act Rule 

17a-3, among other violations.  In July 2006, the State of New Hampshire’s Bureau of Securities 

Regulation obtained a cease-and-desist order against Appelbaum and fined him for servicing the 

                     
6 The NASD was a predecessor to FINRA. 

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7 
 

brokerage accounts of New Hampshire residents while not licensed to sell securities in New 

Hampshire.  And in July 1991, the NASD fined and censured Appelbaum for, among other 

things, effecting securities transactions while failing to maintain required minimum net capital. 

19. Appelbaum resigned from Aegis in May 2021 for failing to follow the firm’s 

procedures and for engaging in unauthorized trading.  Appelbaum is not currently registered with 

a broker-dealer, but he continues to hold FINRA Series 4, 7, 12, 24, 27, 53, and 63 licenses.   

RELATED ENTITY 

20. Aegis Capital Corporation is a New York corporation with its main office in 

New York, New York and over 20 branch offices nationwide, including six branch offices in 

Florida.  During the relevant time period, Appelbaum worked at an Aegis branch office in Boca 

Raton, Florida that Aegis recently closed.  Aegis has been registered with the Commission as a 

broker-dealer since 1984 and as an investment adviser since 2010.   

FACTUAL ALLEGATIONS 

Appelbaum Made Customer-Specific 
Recommendations That Were Unsuitable  
 

21.  As a registered representative, Appelbaum was required to make customer-

specific suitability determinations for securities transactions that he recommended.  In particular, 

he had a duty to determine that the securities that he recommended to his customers were 

suitable for those customers in light of their financial needs, investment objectives, risk 

tolerance, investment time horizons, and other circumstances.   

22. This obligation was incorporated into Aegis’s Written Supervisory Procedures 

(“WSPs”).  For example, Aegis’s WSPs required its registered representatives to comply with the 

customer-specific suitability requirements set forth in FINRA Rule 2111.  Under FINRA Rule 

2111, registered representatives are required to recommend purchases of securities that are 

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8 
 

suitable for the customer, based on the customer’s investment profile, which includes the 

customer’s age, financial situation and needs, tax status, investment objectives, investment 

experience, investment time horizon, liquidity needs, risk tolerance, other investments, and any 

other information the customer may disclose to the member or associated person in connection 

with such recommendation.   

23. Appelbaum knew that he was required to make customer-specific suitability 

determinations and to recommend securities that were suitable for his customers.  In fact, 

Appelbaum testified that brokers who are not aware of these requirements “don’t belong in the 

business.” 

24. Aegis’s WSPs also stated that complex products like VRSPs “warrant particular 

care in how they are scrutinized and sold to customers.”  In particular, Aegis’s WSPs stated that 

registered representatives, including Appelbaum, were required to consider the “extent and 

limitation of any principal protection” of complex products like VRSPs in order to “make suitable 

recommendations” to customers. 

25. In July 2017, Aegis established firm-wide procedures specific to structured 

products (the “July 2017 Policy”) that limited the sale of structured products, such as VRSPs, to 

only those customers with “high” or “maximum” risk tolerances.7   

26. Appelbaum recommended and purchased VRSPs for seven customers who – as 

Appelbaum knew, was reckless in not knowing, or should have known – had a “moderate” risk 

tolerance and who were unwilling to risk losing their entire investment.  These recommendations 

were unsuitable for these customers because, among other reasons, (1) the VRSPs lacked any 

                     
7  The customer’s risk tolerances were described in account opening forms signed by the 
customers.   

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9 
 

principal protection at maturity and had complex structures that made recovery of principal at 

maturity contingent upon the performances of one or more equity indexes; (2) VRSP interest 

payments after an initial period were typically contingent upon the performance of equity 

index(es) and the spreads between long-term and short-term United States bond yield curves; and 

(3) the VRSPs typically had maturity dates inconsistent with the seven customers’ investment 

time horizons and sold in the secondary market at significant discounts. 

27. In addition to making unsuitable recommendations and violating the July 2017 

Policy, Appelbaum also failed to comply with other Aegis procedures aimed at ensuring that 

registered representatives disclosed to customers, and that customers understood the risks of 

structured products like VRSPs to customers. 

28. Specifically, from at least July 2017 through at least May 2019, Aegis required its 

registered representatives to provide a “Structured Products Disclosure” form (“Disclosure 

Form”) to each customer when recommending the purchase of structured products such as 

VRSPs.  The Disclosure Form notified customers that structured products offered “no guarantee 

of any specific return on the principal amount or the repayment of all or a portion of the principal 

amount” and that such products “may not be liquid.”  The Disclosure Form also provided a link 

to a January 2015 SEC “Investor Bulletin” on structured notes such as VRSPs.  That investor 

bulletin stated, among other things, that structured notes “can be very complex and have 

significant investment risks” and warned that “[b]efore investing in structured notes, you should 

understand how the notes work and carefully consider their risks.”  The Disclosure Form further 

required customers to sign and return the form and to accept the terms and conditions set forth in 

the form. 

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10 
 

29. After the July 2017 Policy became effective, Appelbaum did not provide the 

Disclosure Form to any of the seven customers before he started purchasing VRSPs in their 

accounts.  In fact, Appelbaum did not provide the Forms to any of the customers for nearly two 

years after Aegis enacted the July 2017 Policy.  

30. Appelbaum also failed to sign a “Structured Product Attestation” forms 

(“Attestation Forms”) for the VRSP purchases for the seven customers during the relevant 

period, again in violation of Aegis policy.  The Attestation Forms required registered 

representatives like Appelbaum to attest to, among other things, that the registered representative 

informed customers of the potential illiquidity and “market risk” of the structured products.   

31. Appelbaum did not comply with Aegis’s structured products procedures – 

including the July 2017 Policy and the policies relating to the Disclosure and Attestation Forms – 

even though the VRSPs that he recommended and purchased for the seven customers were 

structured products as defined in Aegis’s procedures and all of these procedures therefore 

applied to them.8   

32. Appelbaum further failed to take Aegis’s mandatory training regarding the sale of 

structured products, which warned registered representatives to “not guarantee anything, because 

markets might not cooperate.” 

33. In total, Appelbaum purchased over 140 VRSPs for the seven customers from 

July 2017 through May 2019.  He knew, was reckless in not knowing, or should have known that 

these VRSPs were unsuitable for these customers in light of their investment profiles, including 

                     
8 As Appelbaum stated in testimony, the VRSPs are “part of the structured products 
classification.”  Aegis’s structured products procedures applied to sales of all VRSPs, including 
those purchased at issuance and those purchased in the secondary market.   

 

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11 
 

their financial needs, risk tolerance, investment time horizons, and other circumstances, as 

further described below.  The unsuitable VRSPs that Appelbaum recommended, including the 

Committee on Uniform Securities Identification Procedures (“CUSIP”) number for each VRSP 

at issue, are summarized in Exhibit 1 to this Complaint.  

34. Customers 1 and 2:  Customers 1 and 2 are trusts owned by a husband and wife, 

ages 82 and 809 respectively.  The husband and wife each had a “moderate” risk tolerance, were 

unwilling to lose their entire invested principal, and had investment time horizons of 9-11 years.  

From July 2017 through March 2018, Appelbaum purchased at least 21 VRSPs for Customers 1 

and 2, all of which had maturity dates that were 15 years or more from the date of purchase, 

including VRSP purchases that Appelbaum made without the authorization of Customer 1 and 

Customer 2.  Appelbaum knew, was reckless in not knowing, or should have known that the 

VRSPs were unsuitable for Customers 1 and 2 based on their “moderate” risk tolerance, 

unwillingness to lose their entire invested principal, investment time horizons of 9-11 years that 

were inconsistent with the VRSPs, and their respective ages.10 

35. Customer 3:  Customer 3 is a trust owned by a widow, age 89, with a “moderate” 

risk tolerance, who was unwilling to lose her entire invested principal, and had a 1-3 year 

investment time horizon.  From July 2017 through April 2018, Appelbaum purchased at least 16 

VRSPs for Customer 3, all of which had maturity dates that were 10 years or more from the date 

                     
9 The listed ages are the customers’ current ages, not the ages when Appelbaum purchased the 
VRSPs for the customers.   
 
10 Customers 1 and 2 filed a FINRA complaint against Appelbaum stating that the VRSPs that he 
purchased in their accounts were “not suitable” to their financial needs and, along with 
Appelbaum’s practice of “regularly placing trades in [Customer 1’s and 2’s] accounts without 
consent,” caused them “several hundred thousand dollars” in losses.   

 

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of purchase (usually 15 years), including VRSP purchases that he made without Customer 3’s 

authorization.  Appelbaum knew, was reckless in not knowing, or should have known that the 

VRSPs were unsuitable for Customer 3 based on the Customer 3’s “moderate” risk tolerance, her 

unwillingness to lose her entire invested principal, an investment horizon of 1-3 years that was 

inconsistent with the VRSPs, and the age of Customer 3’s owner.  Customer 3 suffered at least 

$200,000 in losses as a result of Appelbaum’s unsuitable recommendations discussed herein and 

the unauthorized trading detailed below.11   

36. Customers 4 and 5:  Customers 4 and 5 are trusts owned by a husband age 86 and 

wife age 83.  The husband and wife each had “moderate” risk profiles, were unwilling to lose 

their entire invested principal, and had a 9-11 year investment horizon.  From at least July 2017 

through at least April 2019, Appelbaum purchased at least 56 VRSPs for Customers 4 and 5, all 

of which had maturity dates that were 15 years or more from the date of purchase, including 

VRSP purchases that Appelbaum made without Customers 4’s and 5’s authorization.  

Appelbaum knew, was reckless in not knowing, or should have known that the VRSPs were 

unsuitable for Customers 4 and 5 based on their “moderate” risk tolerance, unwillingness to lose 

their entire invested principal, the age of Customer 4 and 5’s owner, and their 9-11 years 

investment time horizons.   

37. Customer 6:  Customer 6, age 61, had a “moderate” risk profile, was unwilling to 

lose her entire invested principal, and had an investment horizon of 9-11 years, with a typical 

investment holding period of 1-3 years.  From July 2017 through June 2018, Appelbaum 

                     
11 Customer 3 filed a FINRA arbitration claim against Appelbaum stating that the VRSPs that 
Appelbaum purchased were unsuitable in light of her age and risk tolerance, among other 
reasons.  Customer 3’s FINRA complaint was settled through a payment of $280,000 to 
Customer 3. 

 

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purchased at least nine VRSPs for Customer 6, all of which had maturity dates that were 10 years 

or more from the date of purchase (usually 15 years).  When he made these purchases, 

Appelbaum knew or was reckless in not knowing that the VRSPs were unsuitable for Customer 6 

based on her “moderate” risk tolerance, unwillingness to lose her entire invested principal, and 

her investment time horizon. 

38. Customer 7:  Customer 7, a single-member LLC owned by a woman age 58, had a 

“moderate” risk profile and was unwilling to lose the entire invested principal.  From July 2017 

through April 2019, Appelbaum purchased at least 44 VRSPs for Customer 7, the majority of 

which had maturity dates of 15 years or more, including VRSP purchases that he made without 

Customer 7’s authorization.  Appelbaum knew, was reckless in not knowing, or should have 

known that the VRSPs were unsuitable based on Customer 7’s “moderate” risk tolerance and 

unwillingness to lose her entire invested principal.  Customer 7 suffered at least $1 million in 

losses as a result of Appelbaum’s unsuitable recommendations discussed herein and the 

unauthorized trading detailed below.12   

Appelbaum Made Material Misrepresentations and Omissions  
to His Customers Including Material Omissions Regarding Suitability 
 

39. Appelbaum made materially false and misleading statements regarding the 

VRSPs when recommending and purchasing the VRSPs for his customers.   

40. First, Appelbaum knew, was reckless in not knowing, or should have known that 

the VRSPs were not suitable for the seven customers described above, but he omitted that 

                     
12  Customer 7’s owner filed a FINRA arbitration claim against Appelbaum stating that the 
VRSPs that he purchased were not suitable for Customer 7’s financial needs and that Appelbaum 
had traded in VRSPs in Customer 7’s account without authorization.  Customer 7’s FINRA 
arbitration claim was settled through a $1.65 million payment to Customer 7. 

 

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material fact when he recommended the VRSPs to those customers and when he purchased 

VRSPs in their accounts (often without authorization, as discussed in further detail below).  

Among other things, Appelbaum recommended the transactions, but failed to disclose that the 

VRSPs were unsuitable for customers with a “moderate” risk tolerance or those who were 

unwilling to risk losing their entire invested principal, like the seven customers.  

41. A reasonable investor would have wanted to know that the VRSPs were not 

suitable for the seven customers given their financial needs, or would have found that 

information important to their investment decision.  In fact, multiple customers have stated that 

they would not have invested in VRSPs if they had known that VRSPs were not suitable for their 

financial needs, risk tolerance, investment time horizons, and other characteristics. 

42. Appelbaum also made material misrepresentations to certain customers regarding 

the VRSPs, knowing that his customers relied upon him for information about the VRSPs, and so 

that these customers would not close their accounts, allowing Appelbaum to continue making 

VRSP purchases in those accounts.13   

43. For example, Appelbaum falsely told the owner of Customer 7 that he was 

investing her money in conservative bonds.  Specifically, when investing with Appelbaum, 

                     
13 Appelbaum testified that he did not provide prospectuses to customers for whom he purchased 
VRSPs in the secondary market (which made up a significant portion of the unsuitable VRSP 
trades at issue).  He further testified that he did not provide prospectuses to customers purchasing 
newly issued VRSPs before he made those purchases on their behalf.  Instead, as Appelbaum 
testified, his customers “rely [ ] on me.”  The prospectuses typically outlined the risks associated 
with the VRSPs.  For example, VRSP prospectuses typically stated that the VRSP was a 
“principal-at-risk” security and that customers could lose some or all of their invested principal if 
certain referenced assets, such as the S&P 500, did not perform above certain pre-determined 
ranges at maturity.  Prospectuses also typically expressly warned, “There is no minimum 
payment at maturity.  Accordingly, investors may lose up to their entire initial investment in the 
securities.”  The prospectuses also typically stated that “it is possible you will receive little or no 
interest on the securities” after the initial teaser period. 

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Customer 7’s owner advised Appelbaum that she was only interested in conservative 

investments.  Appelbaum assured Customer 7’s owner that he would purchase “boring bonds” so 

that Customer 7’s owner would have “guaranteed income” for her retirement.  Customer 7 wired 

money to Appelbaum to invest only after Appelbaum provided these assurances.  But instead of 

buying bonds that would provide guaranteed income for Customer 7, Appelbaum used much of 

the money to purchase VRSPs, which were not “boring bonds,” but rather highly complex 

structured products that had the potential to lose their entire principal depending on the 

performance of equity indexes, as well as the potential to not pay interest after an initial period 

that often depended on the performance of equity indexes and Treasury yield curves.  

Appelbaum also did not provide Customer 7 with any prospectus that outlined the risks of the 

VRSPs, particularly the risk that the VRSPs could lose principal and not pay interest. 

44. In December 2018, Customer 7’s owner learned that what she believed to be 

investments in conservative bonds were losing significant market value.  She emailed 

Appelbaum that her husband had “freaked out” when learning of the losses and asked 

Appelbaum to confirm how a substantial portion of Customer 7’s nearly $12 million investment 

with Appelbaum had been lost. 

45. On January 19, 2019, Appelbaum responded by falsely stating that “these bonds 

will pay off at over 12 million” at maturity and “that is not including the interest you will receive 

during this time.”  In fact, a significant portion of Customer 7’s $12 million was not invested in 

conservative bonds, but rather in complex and risky VRSPs.  Appelbaum also stated that, given 

the “destruction of the stock market over the past couple weeks,” the bonds he had supposedly 

purchased for Customer 7 were a particularly good investment, concealing the material fact that 

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the VRSPs’ value – and their payment of interest – was actually linked to the very stock market 

that he said was being “destr[oyed].”   

46. Appelbaum also misleadingly stated in that same communication that Customer 7 

was guaranteed to receive her principal (“par”) at maturity: 

[Customer 7’s owner], bonds go up and down, much like stocks. 
But one of the reasons we buy bonds, is eventually they go back to 
par (100).  In other words, in your case back to 12 million+.  That 
isn’t the case with stocks.  Bonds will have more good and bad 
years ahead, but [Customer 7’s owner’s husband] is looking at a 
‘snapshot’ in time and yes 2018 was not a good year, but we are 
building something not for today but for your retirement.  And 
even if your retirement starts in the next couple of years, you will 
generate enough income along the way to pay for the retirement as 
well as having your bonds go to over 12 million dollars at maturity 
 

(Emphasis added.) 
 

47. Appelbaum’s statements were false and misleading because the VRSPs were not 

guaranteed to go “back to par.”  Instead, unlike traditional debt securities like municipal or 

corporate bonds, their value at maturity was dependent on one or more stock market indexes.   

48. After Appelbaum made these false and misleading statements in January 2019, 

Customer 7 kept a brokerage account with Appelbaum and he continued to purchase unsuitable 

VRSPs in Customer 7’s account.     

49. In March 2019, Customer 7’s owner again emailed Appelbaum to ask about 

losses associated with VRSPs.  Appelbaum responded that he was on vacation and that he would 

call Customer 7’s owner, but he assured her that the losses were “not a significant item.” 

50. After Appelbaum made the false and misleading statement that losses in 

Customer 7’s account was not a “significant item,” Customer 7 kept a brokerage account with 

Appelbaum and he continued to purchase unsuitable VRSPs in Customer 7’s account.     

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51. Ultimately, Appelbaum apologized to Customer 7’s owner for purchasing the 

VRSPs for Customer 7 and asked for six months to “make it better.”  Customer 7’s owner 

severed her relationship with Appelbaum and filed a FINRA arbitration claim against him.14   

52. Appelbaum made similar false and misleading statements to other customers.  In 

or around May 2018, Customer 3’s owner (who was in her mid-80s at the time) asked 

Appelbaum to provide the market value of all VRSPs that Appelbaum had purchased for 

Customer 3, as she had noted that those market values had significantly decreased from their 

“par” value.  Customer 3’s owner conveyed her request to Appelbaum through her son.  

Appelbaum’s assistant responded with the market value of the Customer 3’s portfolio, which was 

heavily concentrated in VRSPs and showed significant losses.  Less than 10 minutes later, the 

son responded to Appelbaum that Customer 3’s owner “directs that you stop trading until she’s 

had a chance to review the account.”  The following day, the son wrote an email to Appelbaum 

advising that Customer 3’s owner had requested that Appelbaum “sell the structured notes and 

obtain the best achievable price.”  Appelbaum responded by falsely stating that the $1.7 million 

owned by Customer 3, much of which was invested in VRSPs, “will appreciate to a par value of 

$2,044,000 at maturity.”  But as Appelbaum knew, was reckless in not knowing, or should have 

known, the VRSPs that Customer 3 owned were not principal protected and thus were not 

guaranteed to “appreciate to a par value.”  In testimony, Appelbaum admitted that he had made 

                     
14 The FINRA arbitration against Appelbaum, which was settled through a $1.65 million 
payment to Customer 7, alleged that Appelbaum’s VRSP trades were unauthorized and 
unsuitable, and that Appelbaum made material misstatements and omissions.  
 

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this statement based on “an assumption that the non-principal protected notes would also pay off 

even though they’re not protected[.]”15   

53. Appelbaum made similar misrepresentations to Customers 1 and 2, trusts owned 

by a husband and wife both in their 80s.  The owners of Customers 1 and 2 told Appelbaum that 

they wanted to maximize income but did not want to lose principal.  Nonetheless, Appelbaum 

purchased over 20 VRSPs that were not guaranteed to repay any principal at maturity or any 

interest after an initial teaser period.  When Customers 1 and 2 confronted Appelbaum about 

losses in their account, Appelbaum falsely stated that the “value [Customer 1 and 2] see on the 

statements is not the real value” and told them that they should not worry about the principal loss 

on paper.  He concealed the material fact that the VRSPs might not repay any principal at 

maturity depending on the performance of certain stock market indexes. 

Appelbaum Engaged In Fraudulent Unauthorized Trading  

54. All of the accounts managed by Appelbaum were non-discretionary, meaning that 

he was required to seek and obtain customer authorization prior to each and every transaction in 

those accounts.  As Appelbaum testified, “I’ve never opened a discretionary account . . . I don’t 

have discretionary accounts.”  Appelbaum further testified that he never even had “limited 

authorization” over any of his customers’ accounts.   

55. Appelbaum knew that Aegis had a policy that prohibited unauthorized trading and 

that obtaining authorization before any trade was “the way you’re supposed to do it.”  As he 

testified, Aegis policy “requires [ ] that a broker speak to a client before putting an order in for 

that client” for any non-discretionary accounts, including all of his customers’ accounts.  

                     
15 As noted above, in 2021, Customer 3’s owner filed a FINRA complaint against Appelbaum, 
alleging, among other things, that Appelbaum made material misrepresentations and unsuitable 
recommendations. 

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56. Appelbaum further testified that “as a matter of practice” the authorization was 

“usually minutes to hours” before a trade, but that he believed that he had “a 24 hour window to 

be able to take an order and then fill it.”  Appelbaum testified that he knew that he was required 

to obtain the following authorization from each of his customers 24 hours before a trade: 

Q.   What, if any, term of a trade does the broker need to obtain 
authorization for within the 24-hour window that you just 
mentioned? 

 
A. Well, certainly the name of the security, all of its most 

important elements. In the case of - because I do almost all 
in bonds the interest rate, the maturity date, the price, the 
yield, if there's any call features, any yield to the call, all 
the pertinent facts necessary for a client to make a decision, 
which I, sort of, included, I think, most of them.  

 
Q.  Is it your understanding that a broker needs to obtain the 

quantity of securities traded? 
 
A. Of course the -- yes. I left that out. Of course the quantity. 
  

57. Appelbaum testified that he typically obtained authorization from his customers 

through a phone call with the customers.  Appelbaum further testified that “I do almost all of my 

business over the phone,” so customer authorizations would have been over the phone.  As a 

result, any customer authorizations that Appelbaum obtained would have been through a phone 

call between Appelbaum and each customer. 

58. Multiple customers have stated that Appelbaum did not obtain authorization 

before purchasing and selling VRSPs in their accounts.  Four customers (Customers 1, 2, 3, and 

7) also filed FINRA complaints against Appelbaum for unauthorized trading and for trading 

using his own discretion in their accounts. 

59. An analysis of Appelbaum’s personal cell phone record and a summary of phone 

calls provided by Aegis to the SEC, compared with the phone numbers of the seven customers, 

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shows hundreds of VRSP transactions in the customers’ accounts from August 2015 through 

May 2019 where Appelbaum did not contact the customer to obtain authorization prior to the 

transaction.  The results of that analysis, which excludes any trades that were placed seven days 

or less before or after a phone call between Appelbaum and the customers, is attached as Exhibit 

2. 

60. Appelbaum engaged in the unauthorized trading even though he knew, or was 

reckless in not knowing, that the practice was prohibited by law and by Aegis policy.  In those 

trades, Appelbaum purchased and sold VRSPs in the accounts of customers for whom VRSPs 

were unsuitable and to whom he had made material misrepresentations and omissions regarding 

VRSPs.   

61. On the vast majority of unauthorized trades set forth in Exhibit 2, Appelbaum 

earned compensation.    

62. Appelbaum admitted that he engaged in unauthorized trading in sworn testimony: 

Q. So there were sometimes where you did not g[e]t 
authorization before making a trade; is that correct? 

 
A.  Look, I am sure through the years there were a few times 

that it happened. I can’t say ever.  “Always” is a tough 
word to say. Okay?  So if you're going to put me in a box, 
I'll say yes, I have done it, but that was not my practice. 

 
This Action is Timely Filed 
 

63.  Appelbaum entered into agreements with the SEC in which he agreed to toll, for 

various periods and various lengths of time, any statute of limitations applicable to the conduct 

and claims alleged herein.  Defendant’s tolling agreements cover the period between December 

10, 2019 through July 30, 2021. 

 

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FIRST CLAIM FOR RELIEF 
Violations of Section 17(a) of the Securities Act  

  
64. The Commission realleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 63, as if fully set forth herein.  

65. Defendant, 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, has: (a) knowingly or recklessly employed devices, 

schemes, or artifices to defraud; (b) knowingly, recklessly, or negligently obtained money or 

property by means of untrue statements of a material fact or omissions of a material fact 

necessary in order to make the statement made, in light of the circumstances under which they 

were made, not misleading; and/or (c) knowingly, recklessly, or negligently 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. 

66. By reason of the foregoing, the Defendant, directly or indirectly, singly or in 

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

[15 U.S.C. § 77q(a)]. 

SECOND CLAIM FOR RELIEF 
Violation of Section 10(b) of the Exchange Act and Rule 10b-5 

 
67. The Commission realleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 63, as if fully set forth herein.  

68. Defendant, directly or indirectly, acting intentionally, knowingly or recklessly, 

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, has: (a) employed devices, schemes, or artifices to defraud; (b) made untrue 

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statements of a material fact or omitted to state a material fact necessary in order to make the 

statement made, in light of the circumstances under which they were made, not misleading; 

and/or (c) engaged in acts, transactions, practices, or courses of business which operated or 

would operate as a fraud or deceit upon other persons.  

69. By reason of the foregoing, Defendant, directly or indirectly, singly or in concert, 

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

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

PRAYER FOR RELIEF 

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

Judgment:  

I. 

Permanently enjoining the Defendant from committing, aiding and abetting, or otherwise 

engaging in conduct that would make him liable for the violations of the federal securities laws 

alleged in this Complaint.  See Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)]; Section 

21(d)(1) of the Exchange Act [15 U.S.C. § 78u(d)(1)]. 

II. 

Ordering the Defendant to disgorge any ill-gotten gains and to pay prejudgment interest 

thereon.  See Sections 21(d)(5) and 21(d)(7) of the Exchange Act [15 U.S.C. § 78u(d)(5) and 

(d)(7)]. 

III. 

Ordering the Defendant to pay a civil monetary penalty.  See 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)]. 

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IV. 

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, Plaintiff demands trial by 

jury in this action of all issues so triable.  

 

Dated:  July 28, 2022    Respectfully submitted, 

 
      /s/ James P. Connor     
      James P. Connor 
      Eugene N. Hansen 
      U.S. Securities and Exchange Commission 

100 F Street, NE 
Washington, DC 20549 
Tel: (202) 551-8394 

      Email: [email protected] 
Attorneys for Plaintiff 

 
       
Of counsel: 
Yuri B. Zelinsky 
Anik A. Shah 
100 F Street, NE  
Washington, DC 20549 
 

Case 9:22-cv-81115-XXXX   Document 1   Entered on FLSD Docket 07/28/2022   Page 23 of 23

mailto:[email protected]

	UNITED STATES DISTRICT COURT
	SOUTHERN DISTRICT OF FLORIDA