SEC v. RONALD FELDSTEIN; MARA CAPITAL MANAGEMENT LLC; VITA HEALTH OF AMERICA, LLC; and TRADEMORE CAPITAL MANAGEMENT, LLC, Southern District of New York (Jan. 1, 2013) — Complaint

13 cv 61681 

Counsel ofRecord: 
ANDREW M. CALAMARI 
REGIONAL DIRECTOR 
Attorney for the Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
3 World Financial Center, Suite 400 
New York, New York 10281-1022 
(212) 336-0148 (Primoff) 
Email: [email protected] 
UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT 
OF NEW YORK 
------------------------------------------------------------------------x 
SECURITIES AND EXCHANGE COMMISSION, 
Plaintiff, 

-against-

RONALD FELDSTEIN, MARA CAPITAL 
MANAGEMENT LLC, and VITA HEALTH 
OF AMERICA, LLC, 
·Defendants, 

-and-

TRADEMORE CAPITAL 
MANAGEMENT, LLC, 
Relief Defendant. 
------------------------------------------------------------------------x 
Plaintiff Securities and Exchange Commission (the "Commission"), for its Complaint 
against defendants Ronald Feldstein ("Feldstein"), Mara Capital Management LLC ("Mara 
Capital"), and 
Vita Health 
ofAmerica, LLC ("Vita Health") (collectively "Defe~dants") and 
Relief Defendant Trademore Capital Management, LLC ("Trademore" or 
"ReliefDefendant"), 
alleges as follows: 
SUMMARY OF ALLEGATIONS 
1. This action involves Ronald Feldstein, an individual who carried out a two-part 
fraudulent securities scheme that began in late 2008 and continued to late 2011. In the first part 
13Civ. __L_) 
COMPLAINT 
ECFCASE 
JURY TRIAL DEMANDED 

ofthe scheme, from December 2008 through February 2009, Feldstein and his two entities, Mara 
Capital and Vita Health, defrauded three different broker-dealers through an unlawful "free­
riding" trading scheme that caused them more than $2 million in losses. Then, later in 
2009 and 
continuing into 2011, Feldstein bilked several investors out 
ofmore than $450,000 through 
fraudulent offerings 
of securities. 
2. In Feldstein's free-riding scheme, he purported to be operating two investment 
funds, Mara Capital and Vita Health, which were in fact thinly-capitalized entities that he owned 
and controlled for his own personal trading. Feldstein opened accounts at three broker-dealers in 
Mara Capital's and Vita Health's names, and then defrauded the broker-dealers by making large 
stock purchase orders through them for which Defendants had neither the means nor the 
intention to pay with their own funds. 
3. It was critical to Feldstein's scheme that the accounts he opened with these 
broker-dealers were "delivery versus payment," or "DVP accounts," because such accounts did 
not require Defendants to maintain cash in them. The broker-dealers offered the DVP accounts 
to Feldstein with the understanding that he and his entities held sufficient cash with a third party 
custodial bank to settle trades in the DVP accounts, and that Feldstein and his entities would 
make that cash available to settle trades he ordered by issuing instructions to the custodial bank 
to send cash to the 
DVP accounts. 
4. Defendants falsely represented to these broker-dealers or otherwise intentionally 
led them to believe both that they had sufficient cash in their custodial account to settle their 
trades, when Defendants knew they did not, and that they would issue instructions to settle these 
trades, when Defendants knew they would not 
if the trades were substantially unprofitable. 
5. Defendants' undisclosed plan was to trade risk-free with these broker-dealers' 
2 


money: When they purchased securities, they intended to pay for them with proceeds from an 
off-setting sale they would arrange with another broker-dealer before the settlement date. Thus, 
they intended to settle those trades where the price 
ofthe securities they purchased rose after the 
trade date, use the sales proceeds to pay for them, and pocket the profit. 
But Defendants knew 
that 
ifthe price ofthe security declined substantially after the trade, they could not pay for them 
with an off-setting sale, 
and could not and never intended to pay for them with their own funds. 
Rather, their plan was simply to refuse to issue instructions to settle the trades, and stick the 
broker-dealers with the unprofitable positions. Defendants carried out their "Heads We Win, 
Tails You Lose" scheme from September 2008 through February 2009 with three different 
broker-dealers and millions 
ofdollars in securities trades, causing more than $2 million in losses 
to the broker-dealers, while simultaneously avoiding bearing those losses themselves. 
6. Later in 
2009 and continuing to 2011, Feldstein shifted his fraudulent conduct to 
several individual investors, 
whom he induced to give him and Trademore approximately 
$450,000, based upon his various false promises to use that money to ( 1) purchase stock for them 
in a certain penny-stock issuer; (2) invest in a purported fashion company's initial public offering 
("IPO"); and (3) invest in a hedge fund that Feldstein falsely described as substantial and 
successful. Feldstein never intended to purchase stock for these investors with this money, 
invest their money in an IPO, 
or invest their money in a hedge fund, and he never did so. Rather, 
he converted that money (much 
of which the investors had intended for retirement or their 
children's education) for his 
own personal use, which included funding a luxurious lifestyle that 
involved a Bentley automobile, summers in the Hamptons, and casino junkets. 
7. By virtue ofthe conduct alleged in this Complaint, Defendants, singly or in 
concert, have engaged in transactions, acts, practices, and/or courses 
of business that constitute 
3 


violations of Section 17(a) ofthe Securities Act of 1933 ("Securities Act") [15 U.S.C. §§ 77q(a)] 
and Section IO(b) 
ofthe Securities Exchange Act of 1934 (the "Exchange Act"), [15 U.S.C.A. 
§ 78j(b)], and Rule 10b-5(b) thereunder, [17 C.F.R. § 240.10b-5(b)]. 
NATURE 
OF THE PROCEEDINGS AND RELIEF SOUGHT 
8. The Commission brings this action pursuant to the authority conferred upon it by 
Section 20(b) 
ofthe Securities Act [15 U.S.C. § 77t(b)], and Section 21(d)(l) ofthe Exchange 
Act, [15 U.S.C. 
§ 78u(d)(1)], seeking a final judgment: (a) permanently enjoining Defendants 
from engaging in the acts, practices, and courses 
of business alleged herein; (b) requiring 
Defendants and Relief Defendant to disgorge the ill-gotten gains they received, 
if any, as a result 
oftheir violations, and to pay prejudgment interest thereon; (c) barring Feldstein from 
participating in future penny stock offerings pursuant to pursuant to Section 20(g) ofthe 
Securities Act [15 U.S.C. 
§ 77t(g)] and Section 21(d)(6) ofthe Exchange Act, [15 U.S.C. 
§ 78u(d)(6)]; and (d) imposing civil monetary penalties upon Feldstein pursuant to Section 20(d) 
ofthe Securities Act [15 U.S.C. § 77t(d)] and upon all Defendants pursuant to Section 2l(d)(3) 
ofthe Exchange Act, [15 U.S.C. § 78u(d)(3)]. 
JURISDICTION AND VENUE 
9. This Court has jurisdiction over this action pursuant to Sections 20(d) and 22(a) 
ofthe Securities Act [15 U.S.C. §§ 77t(d) and 77v(a)], and Sections 2l(d), 2l{e), and 27 of the 
Exchange Act [15 U.S.C. 
§§ 78u(d), 78u(e), and 78aa]. 
10. Venue lies in this District pursuant to Sections 20(b) and 22(a) of the Securities 
Act 
[15 U.S.C. §§ 77t(b) and 77v(a)] and Section 27 ofthe Exchange Act [15 U.S.C. § 78aa], 
because Feldstein resides in the Southern District 
ofNew York, Mara Capital's and Vita 
Health's principal places 
ofbusiness are in the Southern District ofNew York and certain of the 
4 


transactions, acts, practices, and courses of business constituting the violations alleged herein 
occurred within the Southern District 
of New York. 
11. Feldstein, Mara Capital, and Vita Health made use 
ofthe means or instruments of 
transportation or communication in interstate commerce, or ofthe mails, in connection with the 
transactions, acts, practices, and courses 
of business alleged in this Complaint. 
DEFENDANTS 
12. Ronald Feldstein, age 67, is a resident ofNew York, New York. 
13. 
Mara Capital is a New York corporation with its principal place ofbusinessin 
New York, New York at Feldstein's residence. Mara Capital purports to be an investment fund. 
Feldstein is the owner ofMara Capital, which was incorporated on or around September 10, 
2008. 
14. Vita Health is a New York corporation with its principal place of business in 
New York, New York at Feldstein's residence. Vita Health purportsto be an investment fund. 
Feldstein is the owner 
ofVita Health, which was incorporated on or around June 2, 2005. 
RELIEF DEFENDANT 
15. Trademore is  a New York corporation with its principal place ofbusiness in 
New York, New York at Feldstein's residence. Trademore purports to be an investment fund. 
Feldstein is the owner ofTrademore, which was incorporated on or around March 23,2009. 
5 


OTHER RELEVENT ENTITY 

16. MJJS Corp. LLC ("MJJS") was a New York corporation headquartered in 
Syosset, New York that has never been registered with the Commission in any capacity. MJJS 
was dissolved on or around April 27, 2011. 
FACTS 
17. From September 2008 through April 2009, Feldstein, Vita Health, and Mara 
Capital engaged in a fraudulent free-riding scheme, trading through DVP accounts at several 
broker-dealers, identified herein as "Broker-Dealer A" "Broker-Dealer B",'and "Broker-Dealer 
C". 
18. A DVP account does not hold customer funds or securities and is instead used for 
trading. The brokerage firm where a DVP account is held is known as the "executing" broker. 
By definition, such accounts allow a customer to buy securities at the executing broker and not 
pay for them until delivery and settlement, usually arranged with a different custodial account 
held by the customer at another firm, which the customer identifies to the executing broker upon 
opening the DVP account. Settlement is the process by which securities are delivered in 
exchange for cash payment to complete a trade. The settlement date for the purchase or sale 
of 
stock is usually three business days after a trade is made. 
19. Defendants set up DVP accounts with Broker-Dealer A, Broker-Dealer B, and 
Broker-Dealer C to engage in a fraudulent "free-riding" scheme, in which they would purchase 
securities risk-free, gambling only with the broker-dealers' money. They did so by leading the 
executing brokers to believe that they had sufficient cash to pay for their purchases and intended 
to make such cash available by instructing the custodial bank to settle the trades. 
20. Feldstein conducted his trading for Mara Capital in 
DVP accounts through an 
6 


account Mara Capital held with a London-based institution ("London Broker"). London Broker 
performed settlement services for Feldstein and Mara Capital 
in connection with Feldstein's 
trading activity at numerous executing broker-dealers. London Broker had 
an agreement for 
access to an omnibus account with a Netherlands-based bank (the "Intermediary Bank"), which 
in turn had an agreement with its United States agent bank (the "Clearing Bank"), to settle 
securities trades and custody securities 
on behalf ofIntermediary Bank's customers with access 
to its omnibus account, such as London Broker, through a specific, numbered account (the 
"Clearing Account"). 
Neither Feldstein nor Mara Capital had an agreement with the 
Intermediary Bank to use the Clearing Account, but rather were permitted access to it for 
clearing and settlement purposes under their agreement with London Broker. The trading 
arrangement was thus as follows: 
• 	Trades that Feldstein 
and Mara Capital ordered through the executing broker­
dealers could be settled only 
if Feldstein and Mara Capital directed London 
Broker to do so. 
• 	Once London Broker received a settlement instruction, it would notify 
Intermediary 
Bank to instruct Clearing Bank to deliver payment, in the event ofa 
purchase, 
or securities, in the event ofa sale, to the executing brokers, using cash 
or securities held in the Clearing Account. 
• 	Clearing 
Bank would then deliver payment or securities to the executing brokers 
in exchange for the delivery 
of stock or payment. 
21. As Feldstein and Vita Health knew, 
or were reckless in not knowing, Vita Health, 
unlike Mara Capital, had 
no account with London Broker, no access to the Clearing Account, 
and thus no ability to settle trades through the Clearing Account. 
7 


Defendants Defraud Broker-Dealer A 
22. Feldstein opened an account at Broker-Dealer A for his alter ego corporation, Vita 
Health, on March 24, 2008. Feldstein specifically requested and obtained a "DVP"·account. 
In 
opening this account, Feldstein and Vita Health provided settlement instructions to Broker­
Dealer A in which they knowingly, intentionally, or recklessly misrepresented that Vita Health 
was authorized to settle trades with Broker-Dealer A through the Clearing Account. This was a 
material misrepresentation. 
Vita Health never had an account with London Broker through 
which it had access to the Clearing Account, and thus was not authorized to use the Clearing 
Account to settle trades. 
23. Feldstein and 
Vita Health also intentionally, knowingly, or recklessly, 
misrepresented or otherwise led Broker-Dealer A to believe that he and Vita Health had cash 
sufficient in Vita Health's purported account with London Broker to pay for securities that he 
and Vita Health purchased when they ordered the trades, and would make cash available to 
Broker-Dealer A to settle such trades. In doing so, they also intentionally, knowingly, or 
recklessly, failed to disclose to Broker-Dealer A that they did not have sufficient cash to pay for 
the securities they purchased when they ordered the trades, and could not and would not make 
funds available 
to settle trades they ordered. 
24. These false statements and omissions were material to Broker-Dealer A when it 
opened the Vita Health DVP account because that account would permit trading in securities, 
while the assets used to settle those trades were purportedly in a separate account that was not 
visible to or under the control 
ofBroker-Dealer A, and Broker-Dealer A would have to bear the 
loss on any unprofitable trades that Defendants Feldstein and Vita Health were unable and/or 
unwilling to settle. 
8 


25. Feldstein and Vita Health made their first transaction in the Broker-Dealer A 
account on September 5, 2008. Feldstein placed an order for Vita Health with the registered 
representative responsible for Vita Health's account, "Representative A", for 56,550 shares 
of 
Lehman ("LEH") stock, which was executed at $16.3903 per share. On September 8, 2008, 
while the price 
ofLEH stock was in a precipitous decline, Representative A emailed the trade 
confirmation to Feldstein, advising that the cost 
of that trade was $928,568. That same day, 
Feldstein telephoned Representative A and asked for the confirmation number 
of the trade, 
ostensibly to give instructions to settle the trade through an account with London Broker with 
access to the Clearing Account. 
On September 9, before the settlement date for this LEH 
transaction, Feldstein placed an order with Representative A for an additional 50,000 LEH 
shares, which was executed at $8.0313 
per share. Shortly afterwards, Representative A sent that 
trade confirmation to Feldstein, advising that the cost 
ofthe trade was $403,065. The price of 
LEH stock continued to decline after September 9, 2013. 
26. As Defendants knew when they placed these trades and at all times subsequent, or 
were reckless in not knowing, they did not have sufficient funds to pay for either 
or both ofthese 
trades, nor did they intend to settle them where, as here, they were substantially unprofitable. 
Furthermore, as Defendants also knew, 
or were reckless in not knowing, neither Feldstein nor 
Vita Health held an account with London Broker and thus could not and did not provide London 
Broker with instructions to settle either 
of these trades. Defendants knowingly or recklessly 
concealed these material facts from Representative A and Broker-Dealer A. They further misled 
Broker-Dealer A when Feldstein asked Representative A for trade details on September 8, before 
he and Vita Health ordered their second trade on September 9, solely to convey the 
misimpression that they intended to settle that first trade when, in fact they never intended to do 
9 


so. 
27. When Clearing Bank received the trade information for Vita Health's initial 
purchase on September 10 from Broker-Dealer A, it disaffirmed or 
"DK'd" ("Don't Know") it­
because Defendants never established an account with London Broker in order to provide 
settlement instructions via London Broker to Clearing Bank, and never provided settlement 
instructions to London Broker. 
28. Representative A immediately tried to reach Feldstein and left him several 
telephone messages, but Feldstein did not return Representative 
A's calls for two days. When 
Representative A did reach Feldstein 
on September 12, Feldstein feigned surprise that Clearing 
Bank had not settled the trades, and said that the information he had previously provided was 
correct. 
29. These were knowingly deceptive statements. Contrary to what Feldstein told 
Representative A, he knew that neither he nor Vita Health 
h!ld provided instructions to settle the 
trades. He also knew that Vita Health could not do so, because Vita Health held no account at 
London Broker. They also knew that Vita Health lacked the funds to pay for the over $1.3 
million in securities it had purchased through Broker-Dealer A, given the steep drop in price 
of 
LEH stock, and Vita Health's inability to use off-setting sales proceeds to cover the cost ofthe 
LEH shares. 
30. On September 12, 2008, Broker-Dealer A, 
in order to avoid further declines in the 
price 
ofthe LEH shares, exercised its right to liquidate the LEH shares Feldstein and Vita Health 
had fraudulently induced Broker-Dealer A 
to purchase on their behalf. The sale was executed at 
a price 
of$3.6232 for net proceeds of$386,050 resulting in a loss to Broker~Dealer A of 
$942,387. Defendants then ignored Broker-Dealer A's demand for payment. 
10 


Defendants Defraud Broker-Dealer B 
31. Approximately two months after the failed Broker-Dealer A trades, Feldstein 
opened a DVP account at Broker-Dealer B for his other company, Mara Capital, 
on December 
18,2008. Among other things, Feldstein and Mara Capital provided Broker-Dealer B written 
settlement instructions identifying the Clearing Account as the settling account for securities 
trades placed with it. 
32. In opening this account and providing Broker-Dealer B with these settlement 
instructions, Feldstein and Mara Capital intentionally, knowingly, 
or recklessly, misrepresented 
or otherwise led Broker-Dealer B to believe that Mara Capital had cash sufficient to pay for 
securities purchased with Broker-Dealer 
Bin Mara Capital's account with London Broker, and 
that they would make funds available to settle those trades. In doing so, they also intentionally, 
knowingly, or recklessly, failed to disclose to Broker-Dealer B that they did not have sufficient 
cash in Mara Capital's account with London Broker to pay for the securities they purchased 
when they ordered the trades, and could not and would not make funds available to settle trades 
they ordered. 
33. These false statements and omissions were material to Broker-Dealer B when it 
opened Mara Capital's 
DVP account because that account would permit trading in securities 
while the purported assets used to settle those trades were purportedly in the separate London 
Broker account, which was not visible to or under the control 
of Broker-Dealer B. Broker­
Dealer B would have to bear the loss 
on any unprofitable trades that Defendants Feldstein and 
Mara Capital were unable and/or unwilling to settle. 
34. To further mislead Broker-Dealer B into believing that Defendants were 
financially capable and willing to settle the trades they 
would order through it, Defendants also 
11 


knowingly, intentionally, or recklessly misrepresented on account opening forms to Broker­
Dealer B that Mara Capital had assets 
of $500 million or more. This was a material 
misrepresentation. 
35. 
On February 10, 2009, in three separate telephone calls with the registered 
representative assigned to the Mara Capital account ("Representative B") at Broker-Dealer B, 
Feldstein placed three separate orders to purchase 100,000 shares 
ofthe ETF security Direxion 
Financial Bull 3X shares (trading symbol 
"FAS"). The orders were executed as follows: 
200,000 shares were purchased 
in the morning, at $10.67 and $10.77 per share, respectively, for 
each lot 
of 1 00,000 shares, and another 100,000 shares were purchased in the afternoon, after the 
price declined substantially, at $8.28 per share. 
36. Broker-Dealer B provided Feldstein with a preliminary confirmation 
ofthe first 
two trades by 1:00 p.m., before Feldstein placed his third order for 100,000 shares 
ofFAS. The 
confirmation reported a total purchase price 
of $2,149,970. Broker-Dealer B provided Feldstein 
and Mara Capital with a written confirmation 
ofthe third trade, for an additional purchase price 
of$831,410, before the end ofthe day. Feldstein and Mara Capital did not object to or otherwise 
dispute these confirmations, either that day, or at any time before the settlement date 
ofFebruary 
13, 2009. As Defendants knew, neither Feldstein nor Mara Capital, contrary to their implicit and 
explicit representations to Broker-Dealer 
B, had sufficient cash to pay for these shares in Mara 
Capital's account with London Broker, nor did Defendants have the intention 
of paying for them 
when they placed those trades. 
37. On February 13, 2009, Broker-Dealer B attempted to make an electronic delivery 
ofthe 300,000 shares ofFAS to Clearing Bank. Clearing Bank initially advised that it had 
received instructions to settle only 80,000 shares, from the first order Feldstein had placed, 
12 


although later on February 13, 2009, Feldstein authorized the settlement ofthe third purchase for 
100,000 shares at the price 
of$8.28 per share -  leaving 120,000 shares that were purchased at 
the substantially higher prices unsettled. Feldstein simply 
"DK'ed" those 120,000 shares he had 
purchased, knowingly and falsely claiming he did not order them. In fact, these trades did not 
settle because Feldstein intentionally refused to instruct London Broker to settle them, because 
the price 
ofFAS had declined from those purchase prices after the trade date, and he had no 
intention 
of losing substantial sums on his trades, nor did he have the cash to pay for the shares ­
facts that he knowingly concealed from Broker-Dealer B when he opened the account, when he 
placed the trades, and at all times thereafter. 
38. Feldstein was successful in making profitable, off-setting sales 
ofFAS for only 
180,000 
ofthe 300,000 shares he had committed to buy, and he had no intention ofpaying for 
any more 
ofthe shares he instructed Broker-Dealer B to buy. Feldstein disregarded the repeated 
requests from Representative 
Band others at Broker-Dealer B to settle the remaining 120,000 
shares Defendants purchased at higher, unprofitable prices. At first, Feldstein proffered family 
medical problems to avoid speaking with anyone at Broker-Dealer B. Then, he simply ignored 
their emails, telephone calls and correspondence altogether. 
39. Subsequently, on February 
18 and 20, Broker-Dealer B liquidated the 120,000 
shares 
ofFAS for which Mara Capital and Feldstein continued to refuse to pay, incurring a total 
loss 
of$624,016. 
40. Feldstein and Mara Capital, even while intentionally refusing to settle their 
unprofitable trades, repeatedly and consistently settled profitable trades placed in their DVP 
account with Broker-Dealer B. They did so when they were able to offset purchases at Broker­
Dealer B with sales at higher prices with other broker-dealers, and thus avoided having to use 
13 


their own money. Between February 10 and 20, when Feldstein and Mara Capital left Broker­
Dealer B with $624,016 in losses on Defendants' unsuccessful stock market gambles, Feldstein 
and Mara Capital placed and settled three profitable trades through Broker-Dealer B that yielded 
$67,690 in profits to them. Moreover, on February 17, 2009, the day before Broker-Dealer B 
was forced to liquidate the 120,000 FAS shares at a loss for non-payment, Feldstein, directed 
London Broker to transfer $100,000 from Mara Capital's London Broker account to Mara 
Capital's bank account, which was effected on February 20, 2009. This amount included the 
$67,690 in profits previously earned on trades through Broker-Dealer B. Thus, while Feldstein 
and Mara Capital left Broker-Dealer B with $624,016 in losses, they first withdrew the profits 
earned at Broker-Dealer 
B's expense in their free-riding scheme. 
Defendants Defraud Broker-Dealer C. 
41. A few months after their fraudulent trading with Broker-Dealer A, and shortly 
after they opened an account at Broker-Dealer B, Feldstein and Mara Capital also opened 
another DVP account for Mara Capital with Broker-Dealer C, on January 6, 2009. The DVP 
account allowed Mara Capital to purchase securities and have the securities electronically 
delivered to a fmancial institution designated by Mara Capital in return for immediate electronic 
payment to Broker-Dealer C. 
42. In opening the account, Defendants Feldstein and Mara Capital, among other 
things, provided Broker-Dealer C with written settlement instructions identifying the Clearing 
Account as the settling account for trades placed in the Broker-Dealer C DVP account. In doing 
so, Feldstein and Mara Capital intentionally, knowingly, or recklessly, represented or otherwise 
led Broker-Dealer C to believe that they had cash sufficient to pay for securities that they 
purchased in Mara Capital's account with London Broker when they ordered the trades, and that 
14 


they would make those funds available to settle trades they ordered. In doing so, they also 
intentionally, knowingly, or recklessly failed to disclose to Broker-Dealer C that they did not 
have sufficient cash in Mara Capital's account with London Broker to pay for the securities they 
purchased when they ordered the trades, and could not and would not make funds available to 
settle such trades. 
43. These false statements and omissions were material to Broker-Dealer C when it 
opened Defendants Feldstein and Mara Capital's DVP account, because that account would 
permit trading in securities while the assets used to settle those trades were purportedly in the 
London Broker account, which was not visible to or under the control 
ofBroker-Dealer C. 
Broker-Dealer C would have to bear the loss on any unprofitable trades that Defendants 
Feldstein and Mara Capital were unable and/or unwilling to settle. 
44. Less than a week after opening the DVP account, on January 12, Feldstein placed 
a market order by telephone to buy 50,000 shares 
of Dryships, Inc. ("DRYS") with the registered 
representative assigned to his account ("Representative C"). Representative C called Feldstein 
that day to confirm the execution 
of the trade, at $15.20 per share, for a total cost of$760,750. 
Representative 
C's sales assistant then emailed Feldstein a written confirmation ofthe trade early 
the next morning. 
45. On January 15,2009, the settlement date, and then again on January 16, and once 
more on February 9, Clearing Bank rejected 
delive~y of the 50,000 Dryships shares because 
Mara Capital had not provided settlement instructions. When Representative C and others at 
Broker-Dealer C confronted Feldstein with this 
"DK'd" trade, he repeatedly proffered false 
excuses, such as "accounting" and "reconciliation" problems with the DVP account, and assured 
individuals at Broker-Dealer C that he would take care 
of it. 
15 


46. Feldstein's excuses were knowingly, intentionally, or recklessly false. There 
were no "accounting" or "reconciliation" problems that prevented the settlement 
of this trade. 
The trade did not settle because Feldstein intentionally refused to instruct London Broker to 
settle it, because the price ofDryships stock had declined after the trade date, and he had no 
intention oflosing substantial sums on his trade, nor did he have the cash to pay for the shares ­
facts that he knowingly concealed from Broker-Dealer C when he opened the account, when he 
placed the trade, and at all times thereafter. 
47. Faced with Feldstein and Mara Capital's refusal to settle their purchase 
transaction, Broker-Dealer C finally liquidated the 50,000 Dryships shares, 
on February 9, at the 
prevailing market price, which resulted in a deficit balance to Mara Capital's account 
of 
$442,622. 
48. While walking away from their unprofitable trades, Defendants settled trades that 
were profitable, in circumstances where Defendants were successful in executing offsetting sales 
at other broker-dealers at prices higher than those at which they had purchased, and thus required 
no funds from them. Feldstein and Mara Capital pocketed $166,129 in profits from such trades 
placed at Broker-Dealer C from January 9 to February 
5. Indeed, Feldstein and Mara Capital 
siphoned a total of$125,000 from Mara Capital's London Broker account to its corporate bank 
account on January 30, 2009 and February 3, 2009, even while 
"DK'ing" the unprofitable trades 
he stuck Broker-Dealer C with. 
Defendants' Fraudulent Offerings of Securities to Investors 

Investor A 

49. Investor A is the owner of a dry cleaning business located in New York, New 
York. Feldstein became acquainted with Investor A during the approximately 30 years that he 
was a regular customer 
of Investor A's. 
16 


50. On or around September 10, 2009, Feldstein began soliciting Investor A for two 
distinct investments. First, Feldstein told Investor A about "Company X," a penny stock issuer 
that Feldstein described as the next AT&TNerizon ofthe rural Midwest. Feldstein told Investor 
A that Company 
X's business plan was to bring telecommunications services to rural 
communities. Company X was trading at a price 
of$1.71-$2.35 during September 2009. He 
assured Investor A that Investor A would not lose a penny and encouraged Investor A to give 
him 
$100,000 for Company X stock. Feldstein knowingly or recklessly omitted the material fact 
that the shares he told Investor A he could procure for him were not freely tradable, but rather 
were restricted. 
51. Feldstein also told Investor A about a purportedly new clothing company that 
Feldstein ran with the former CEO 
ofa major American clothing label. Feldstein claimed that 
the company was about to conduct an initial public offering at an expected price 
of$3.00-$5.00 
per share. Feldstein told Investor A that he was offering the shares to 
hi.m at only $1.00 per 
share, and recommended that Investor A invest $100,000 in that company. 
52. In the days following, Feldstein continued to press Investor A to invest in 
Company X and the purported fashion company IPO. Upon his insistent urging, Investor A 
made checks out to Feldstein's entity, Trademore, on September 14, 2009 for 
$200,000­
$100,000 for Company X stock and $100,000 for the IPO shares. Investor A received 66,667 
shares 
ofCompany X stock. The stock, however, was restricted, precluding Investor A from 
trading it on the market. This was a material fact that Feldstein intentionally or recklessly 
omitted when inducing Investor A to invest his money in exchange for the Company X stock. 
53. Feldstein's representation that he would provide Investor A with IPO shares in the 
purported fashion company in exchange for his $100,000, moreover, was false, and Feldstein 
17 


knew it was false, or acted recklessly, when he made it. Feldstein, to this date, has never 
provided Investor A with the purported IPO shares, and instead spent that 
$1 00,000 for his own 
purposes and uses, which was his plan when he induced Investor A to give him money. 
54. In early ·February 2010, Feldstein arrived at Investor 
A's dry cleaner, and told 
Investor A that the Company X stock was trading as high as $2.90 per share, and that he had 
found an investor willing to sell Investor A even more shares, for a below-market price, for a 
total cost of$112,500. Investor A gave Feldstein two checks totaling $112,500, which Feldstein 
promptly cashed. Feldstein never delivered any additional shares 
of Company X to Investor A, 
and he never intended to. Feldstein's material representations to Investor A that he would 
deliver the shares to him were knowingly or recklessly false. Feldstein intended to, and did, use 
Investor 
A's $112,500, by contrast, for his own personal use. 
55. Investor A subsequently insisted that Feldstein return his money, but Feldstein 
repeatedly failed and refused to do so. 
Investors B and C 
56. Investor B has known Feldstein since the 1980s because Investor 
B's family runs 
a car leasing and servicing business 
of which Feldstein has been a longtime customer. Investor 
B was an employee 
ofthe business, which leased and serviced Feldstein's Bentley automobile. 
57. In the summer 
of2009, Feldstein began touting Company X stock to Investor B 
and his wife, Investor C. Feldstein told them that Company X was a lucrative investment 
opportunity and that Company 
X's CEO was a good friend ofhis. Feldstein also provided 
Investors B and C with a Company X prospectus, and represented that he was a dealer or 
representative 
of Company X. In that purported guise, Feldstein offered Investors B and C 
100,000 shares 
of Company X stock for $150,000, or $1.50 per share. 
18 


58. Investors Band C told Feldstein that they could afford only $117,500 to invest in 
Company X, which Feldstein accepted, at the same price 
of$1.50 per share. Feldstein urged 
Investors B and C to deal directly with him, rather than with Company 
X. Between August 17, 
2009 and October 23, 2009, Investors 
Band C gave $117,500 in cash and checks directly to 
Feldstein, which was deposited in Feldstein's personal bank account, and that 
ofhis company, 
Trademore. Investors B and C also filled out and signed a subscription agreement with 
Company 
X, dated October 12,2009, for 78,333 shares, purportedly in exchange for their total 
payments to Feldstein. 
As Feldstein had urged Investors B and C to deal with him, rather than 
Company X, Investors B and C faxed that subscription agreement to Feldstein, not Company X, 
on 
or about October 12,2009. 
59. Feldstein's representations to Investors Band C were materially false, and 
knowingly 
or recklessly so. Feldstein never intended to use the. $117,500 he induced them to 
give him to obtain Company 
X stock, and he never did so. Rather, his dealings with Investors B 
and C were part 
ofhis fraudulent scheme to obtain their money, and divert it for his own uses 
and purposes, which Feldstein carried out after those deposits were made. 
60. After they gave their $117,500, Investors 
Band C repeatedly insisted to Feldstein 
that he deliver the stock 
he had led them to believe they had paid for. He ignored them. He 
subsequently ignored their later demands for the return 
oftheir money. 
Investor D 
61. Investor D, the owner of a gelato business on Long Island, met Feldstein in early 
October 2011. Over the course of several weeks in October, Feldstein met with Investor D at 
Investor 
D's offices for the purpose ofinducing Investor D to give him cash as an investment in 
the hedge fund that Feldstein purportedly owned and operated with another partner. 
62. During these meetings, Feldstein represented that the hedge fund 
he owned and 
19 


operated with another partner had more than $20 million in assets, and assured Investor D that it 
had been earning large returns for investors, had access to new issues, and was a low risk 
investment. Feldstein's representations to Investor D were knowingly or recklessly, and 
materially, false. Feldstein was not the owner or operator 
ofa hedge fund with $20 million in 
assets, and had no intention 
ofproviding Investor D with any share ofa hedge fund with money 
he induced Investor D to give him. Feldstein made these misrepresentations solely to obtain 
Investor 
D's cash and convert it for his own use, and provided Investor D with nothing of value 
in return. 
63. During his meetings with Investor D, Feldstein also purported to be interested in 
investing in Investor 
D's gelato business, and otherwise helping it expand and become more 
successful. Feldstein pressured Investor D to invest quickly, so as not to miss the investment 
opportunities Feldstein's hedge fund could offer him. 
64. 
On October 
26,2011, Feldstein came to Investor D's office, and again pressured 
Investor D to invest in his hedge fund. When Investor D asked for paperwork to document an 
investment, Feldstein grew impatient, and threatened to withhold any future assistance with 
Investor 
D's business. Investor D then agreed to provide Feldstein with cash, and drove with 
Feldstein to Investor 
D's bank, where Investor D arranged to deposit $150,000 with Feldstein, by 
writing a check to MJJS Corp., a company that Feldstein told Investor D he owned, and which 
would invest in the hedge fund 
on Investor D's behalf. In fact, MJJS had been dissolved on 
April27, 2011. 
65. Feldstein immediately deposited Investor 
D's $150,000 check into an MJJS 
account at the same bank. Several days later, Investor D requested that Feldstein return his 
money, which Feldstein did not do. Feldstein also did not furnish Investor D with a 
20 


corresponding interest in a hedge fund investment. 
66. In fact, Feldstein had converted Investor D's money for his own purposes and 
except for a wire of$27,000 to Investor 
D's business on October 31,2011, has failed and refused 
to return Investor 
D's money to him. When Investor D continued to press Feldstein for the 
return 
ofhis money, Feldstein denied any involvement with MJJS. Feldstein also told Investor 
D, in direct contradiction to the representations he made to Investor 
D before Investor D 
invested, that he had no involvement with a hedge fund, or the money that Investor D deposited 
with 
MJJS. Feldstein also told Investor D that he, Feldstein, was judgment-proof. 
FIRST CLAIM FOR RELIEF 

Violations of Section 17(a)(l)-(3) of the Securities Act 

(Against Feldstein) 

67. The Commission realleges and incorporates paragraphs 1 through 66 by reference 
as 
if fully set forth herein. 
68. By engaging in the acts and conduct described in this Complaint, Feldstein by 
use 
ofany means or instruments oftransportation or communication in interstate commerce, or 
by use 
ofthe mails, directly or indirectly, ~n the offer or sale of securities has: 
a. Employed devices, schemes, and artifices to defraud; 
b. 	Obtained money or property by means of untrue statements ofa material fact 
or omitted to state a material fact necessary in order to make the 
statements made, in the light 
of the circumstances under which they were 
made, not misleading; and 
c. 	Engaged in transactions, practices, 
or courses of business which operated or 
would operate as a fraud or deceit upon the purchasers. 
69. 	Feldstein engaged in the above conduct knowingly or recklessly. 
21 


70. By virtue of the foregoing, Feldstein, directly or indirectly, has violated, and 
unless restrained and enjoined, will continue to violate Section 17(a)(1)-(3) 
ofthe Securities Act 
[15 U.S.C. § 77q(a)]. 
SECOND CLAIM FOR RELIEF 

(Violations of Section lO(b) of the Exchange Act and Rule 10b-5(b)) 

(Against Feldstein, Vita Health, and Mara Capital) 

71. The Commission realleges and incorporates paragraphs 1 through 66 by reference 
as 
iffully set forth herein. 
72. By virtue 
ofthe foregoing, Feldstein, Vita Health, and Mara Capital, directly or 
indirectly, singly 
or in concert, by the use ofany means or instrumentality of interstate 
commerce 
or ofthe mails, or ofany facility of any national securities exchange, in connection 
with the purchase 
or sale of securities with scienter: 
d. Employed devices, schemes and artifices to defraud; 
e. 	Made untrue statements ofmaterial fact, or have omitted to state material facts 
necessary in order to make statements made, in light 
ofthe circumstances 
under which they were made, not misleading; and 
f. 	Engaged in acts, practices and courses ofbusiness that would operate as a 
fraud or deceit upon any person 
, 73. By reason 
ofthe foregoing Feldstein, Vita Health, and Mara Capital, directly or 
indirectly, singly 
or in concert, violated, and unless enjoined, will violate again, Section lO(b) of 
the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5(b) thereunder [17 C.F.R. § 240.10b-5(b)]. 
22 


THIRD CLAIM FOR RELIEF 
(Unjust Enrichment) 

(Against Relief Defendant Trademore) 

74. The Commission realleges and incorporates paragraphs I  through 66 by reference 
as 
iffully set forth herein. 
75. 
ReliefDefendant Trademore obtained proceeds ofthe fraudulent offerings of 
securities alleged above under circumstances in which it is not just, equitable, or conscionable 
for Trademore to retain these ill-gotten gains. Trademore gave 
no consideration for its receipt of 
these ill-gotten gains and has no legitimate claim to these funds. Trademore has therefore been 
unjustly enriched. 
76. 
By reason ofthe foregoing, Relief Defendant Trademore should disgorge its ill-
gotten gains, plus prejudgment interest thereon. 
PRAYER FOR RELIEF 
WHEREFORE, the Commission respectfully requests that the Court enter final 
judgments against the Defendants and 
Relief Defendant granting the following relief: 
I. 
Finding that the Defendants violated the securities laws and rules promulgated thereunder 
as alleged herein. 
II. 
Permanently, restraining and enjoining Defendant Feldstein, his agents, servants, 
employees and attorneys and all persons in active concert 
or participation with him, who receive 
actual notice 
ofthe injunction by personal service or otherwise, and each ofthem, from 
committing future violations 
ofSection 17(a) ofthe Securities Act [15 U.S.C. §§ 77q(a)]. 
23 


III. 
Permanently, restraining and enjoining Defendants Feldstein, Mara Capital, and Vita 
Health, their agents, servants, employees and attorneys and all persons in active concert 
or 
participation with them, who receive actual notice ofthe injunction by personal service or 
otherwise, and each 
ofthem, from committing future violations of Section 1 O(b) ofthe Exchange 
Act [15 U.S.C. 
§ 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 
IV. 
Directing Defendants Feldstein, Vita Health, and Mara Capital, and Relief Defendant 
Trademore to disgorge, with prejudgment interest thereon, all ill-gotten gains, received directly 
or indirectly as a result 
ofthe misconduct alleged herein, jointly and severally, and such other 
and further amount as the Court may fmd appropriate. 
v. 
Directing Defendant Feldstein to pay civil money penalties pursuant to Section 20(d) of 
the Securities Act [15 U.S.C. § 77t(d)]. 
VI. 
Directing Defendants Feldstein, Vita Health, and Mara Capital to pay civil money 
penalties pursuant to Section 21(d)(3) 
ofthe Exchange Act [15 U.S.C. § 78u(d)(3)]. 
24 


VII. 
Enjoining and restraining Feldstein from participating in any offering of a penny stock, 
pursuant to Section 20(g) 
ofthe Securities Act [15 U.S.C. § 77t(g)] and Section 21(d)(6) ofthe 
Exchange Act [15 U.S.C. 
§ 78u(d)(6)]. 
VIII. 
Granting such-other and further relief as this Court deems just and proper. 
Dated: 	September 3, 2013 
New York, New York 
::~~:GE:MISSION 
Andrew M. Calamari 
Regional Director 
Attorney for Plaintiff 
SECURITIES AND 
EXCHANGE COMMISSION 
New York Regional Office 
3 World Financial Center, Suite 400 
New York, New York 10281-1022 
(212) 336-0148 (Primoft) 
Email: [email protected] 
OfCounsel: 
Celeste A. Chase 
Richard G. Primoff 
Katherine 
S. Bromberg 
25