The Securities and Exchange Commission (SEC) has filed a lawsuit against Ronald A. Pallek for a fraudulent scheme.

The SEC’s complaint, submitted on March 10, 2025, at the Wisconsin Eastern District Court, alleges that Ronald A. Pallek conducted a fraudulent securities offering by making false promises to double investors’ money in only a year using an “Iron Condor” options trading strategy.

By virtue of his lies, between February 2021 and September 2023, Pallek raised more than $1.54 million from at least 87 investors.

Throughout the course of the scheme, Pallek misrepresented the risks of his options-trading strategy, lied to investors about how he would use their funds, and falsely told investors he had sufficient reserve funds to cover any potential losses. Pallek also sent investors false account statements purporting to show highly successful trading.

In reality, Pallek lost approximately $991,000 trading options and other securities. Pallek also used some investor funds to make Ponzi-like payments to early investors.

In the fall of 2023, after some investors requested the return of their funds, Pallek falsely told them the bank had frozen his accounts. Pallek also showed investors fabricated documents he had created that purported to show both that his bank accounts had been frozen and that they contained more than $1.25 million.

The SEC alleges that, through his conduct, Pallek violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)], Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5], and Section 206(4) of the Investment Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. § 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8].

The Commission seeks a permanent injunction prohibiting securities fraud, disgorgement and prejudgment interest, and civil penalties.