SEC charges founder of Global Trading Institute with fraud
The United States Securities and Exchange Commission (SEC) has brought an emergency action against Ron K. Harrison and Global Trading Institute, LLC (GTI).
The complaint, filed in the California Central District Court, alleges that Harrison and his companies Global Trading Institute, LLC (GTI) and the now defunct Trading Advisement Program, LLC (TAP) have been conducting an ongoing investment advisory fraud since 2016.
From at least 2016 through August of 2021 Harrison, who has been barred by the Financial Industry Regulatory Authority (FINRA) from affiliating with any member brokerage firm, has been acting as an unregistered investment adviser and trading options in his clients’ online brokerage accounts.
Through at least June of 2021, Harrison sent his clients monthly invoices misrepresenting the purported gains from his trading in the clients’ accounts in order to collect an improper performance fee from them based on the overstated gains.
From 2016 through the present, Harrison’s clients have suffered net combined losses of over $2 million from Harrison’s trading. Despite these losses to his clients, Harrison has collected over $900,000 in fees from them.
Since June 2018, Harrison has transferred $279,365 in funds he received from his clients to his girlfriend, Irina Parfyonova (who is named relief defendant in this case), which she largely used to pay for their joint living expenses.
Harrison also defrauded his clients and prospective clients by touting his experience as a “Wall Street” trader but not disclosing that FINRA barred him from the securities industry for misappropriating money from customers and engaging in unauthorized trading in his customers’ accounts.
The SEC alleges that the defendants violated Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a), Section 10(b) of the Exchange Act, 15 U.S.C. § 17j(b), Exchange Act Rule 10b-5, 17 C.F.R. § 240.10b-5, and Sections 206(1) and 206(2) of the Advisers Act. Unless restrained and enjoined, the defendants will engage in future violations of the federal securities laws, the regulator warns.
In this lawsuit, the SEC seeks jointly and severally from Harrison and Parfyonova disgorgement of each party’s ill-gotten gains derived from the conduct alleged in the Complaint plus prejudgment interest thereon, disgorgement from GTI of ill-gotten gains derived from the conduct alleged in the Complaint plus prejudgment interest thereon, and civil penalties.