SEC secures judgment against orchestrator of market manipulation scheme
On December 28, 2020, the United States District Court for the District of New Jersey entered a final consent judgment against Joseph Taub, whom the Securities and Exchange Commission (SEC) charged with orchestrating a market manipulation scheme.
The SEC’s complaint, initially filed on December 12, 2016, alleged that Taub engaged in a fraudulent market manipulation scheme, utilizing dozens of securities accounts at several brokerage firms to create the false appearance of trading interest and activity in particular exchange-traded securities. This enabled him to purchase stocks at artificially low prices and then quickly sell them at artificially high prices for substantial profits.
The complaint further alleged that Taub took steps to conceal the trading scheme and supervised the manipulative trading of a co-defendant.
In a parallel criminal action, the U.S. Attorney’s Office for the District of New Jersey filed criminal charges against Taub. The defendant pleaded guilty to securities fraud and conspiracy to defraud the United States on July 28, 2020. In the criminal case, Taub was sentenced on December 22, 2020 to 18 months imprisonment, ordered to pay forfeiture of $17.1 million, and ordered to pay restitution of $394,424 to the Internal Revenue Service.
The final judgment entered against Taub in the SEC case permanently enjoins him from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933 and the market manipulation provision of Section 9(a)(2) of the Exchange Act. In addition, the judgment imposes a conduct-based injunction permanently prohibiting Taub from participating in certain securities transactions.
The judgment also orders him to pay disgorgement of $17.1 million, which will be deemed satisfied by the forfeiture ordered in the parallel criminal case.
The SEC’s case remains pending against defendant Shaun Greenwald.