SEC goes after unregistered brokerage SureTrader
The United States Securities and Exchange Commission (SEC) has filed charges against MintBroker International Ltd., formerly known as Swiss America Securities, Ltd. and doing business as SureTrader, a Bahamas-based broker-dealer, with unlawfully operating as a broker-dealer in the United States without being registered. The SEC also charged Puerto Rico-based Guy Gentile, SureTrader’s founder, owner, and CEO, as SureTrader’s control person with respect to SureTrader’s unlawful activities.
According to the SEC’s complaint, beginning in March 2016 and continuing through November 2019, SureTrader operated an offshore broker-dealer that marketed its ability to help novice day traders in the United States circumvent U.S. rules that regulate “pattern day trading.” A pattern day trader is any margin customer that day trades four or more times in five business days, provided the number of day trades are more than 6% of the customer’s total trading activity for that same period.
The Commission alleges that SureTrader, through its website, by email, and by means of advertisements on popular U.S.-based day trading websites, solicited thousands of US-based customers to open accounts with and trade through the unregistered brokerage. The SEC further alleges that, although it was not registered with the SEC as a broker-dealer during this period, SureTrader nevertheless engaged in ongoing securities relationships with U.S. customers, including by holding funds and executing transactions on their behalf.
According to the complaint, as a result of their efforts, SureTrader and Gentile received millions of dollars in transaction-based compensation.
The SEC’s complaint, filed in the Southern District of Florida on March 22, 2021, charges SureTrader with violating the broker-dealer registration provisions of Section 15(a)(1) of the Securities Exchange Act of 1934, and charges Gentile with control person liability under Section 20(a) of the Exchange Act and with violating Section 15(a)(1) of the Exchange Act through or by means of SureTrader in violation of Section 20(b) of the Exchange Act.
In this action, the regulator seeks injunctive relief, disgorgement of ill-gotten gains with pre-judgment interest, and civil penalties.