SEC bars CEO of Worldwide Markets from association with any broker
The Securities and Exchange Commission (SEC) today announced that public administrative proceedings are instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) against Thomas F. Plaut.
He is the sole owner, Chairman, and CEO of Worldwide Markets Ltd. (WWM), a British Virgin Islands company with its principal place of business in Woodcliff Lake, New Jersey. WWM provided an online trading platform for U.S.-based equities, commodities, and Forex.
Respondent is also the 85% owner of TAB Networks, Inc. (TAB), a Delaware company also having its principal place of business in Woodcliff Lake, New Jersey. TAB was a provider of an online trading platform for U.S.-based equities, commodities, and foreign exchange. TAB’s only customer was WWM, for which it supplied all U.S.-based operational services.
WWM was registered as a broker- dealer in the British Virgin Islands, but WWM has never been registered with the Commission in any capacity.
On March 30, 2022, a final judgment was entered by consent against Plaut, permanently enjoining him from future violations of Section 5(e) of the Securities Act of 1933 (“Securities Act”), and Sections 6(l), 10(b), and 15(a)(1) of the Exchange Act, and Rule 10b-5 thereunder, in a civil action in the United States District Court for the District of New Jersey.
The Commission’s complaint alleged that, starting in at least June 2014, WWM solicited investments from retail customers using a website and other solicitation materials that offered customers the ability to “own and trade” stocks and options listed on the New York Stock Exchange and NASDAQ.
In reality, however, WWM’s customers’ funds were not used to trade stocks; instead, WWM sold those customers CFDs based on the value of single U.S. equities. WWM then commingled the money customers deposited at WWM and used it to fund WWM’s operations.
WWM falsely led customers to believe that it was offering them a trading platform that operated in the manner of a typical securities brokerage account. By fall 2017, WWM’s business was failing, and beginning in at least January 2018, WWM was delinquent in payments to the service provider that provided WWM’s online trading platform, which in turn cut off WWM customers’ access to the trading platform.
Thereafter, WWM evaded repeated requests from customers to access their accounts or withdraw their funds. Additionally, because the values of the CFDs that WWM sold to its customers were tied to the values of underlying securities, they were security-based swaps, which must be (but were not) registered with the Commission and must be (but were not) executed on a registered national exchange.
In view of the foregoing, the SEC finds it appropriate and in the public interest to impose the sanctions agreed to in Respondent’s Offer.
Accordingly, the SEC ordered that Plaut is barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization. He has the right to apply for reentry after five years to the appropriate self-regulatory organization, or if there is none, to the Commission.