SEC Charges Emil Botvinnik & Jovannie Aquino With Defrauding Customers

SEC Charges Emil Botvinnik & Jovannie Aquino With Defrauding CustomersThe Securities and Exchange Commission charged two brokers for recommending excessive levels of trading that were costly for retail customers but lucrative for the brokers.  

In separate complaints filed in federal court in Manhattan, the SEC alleges that Florida resident Emil Botvinnik and New York resident Jovannie Aquino recommended frequent, short-term trades that generated large commissions for the brokers but were almost guaranteed to lose money for their customers. According to the SEC’s complaints, Botvinnik’s and Aquino’s customers – a number of whom were at or near retirement age – lost approximately $3.6 million as a result of the trades while the brokers pocketed approximately $4.6 million in commissions.  

“We are diligently pursuing deceitful brokers who prey on their customers,” said Antonia Chion, Associate Director in the SEC’s Division of Enforcement and Chair of the Enforcement Division’s Broker-Dealer Task Force. “Brokers need to ensure that the level of trading they recommend is suitable for their customers, and investors should be on the lookout for frequent trading in their accounts.”  

The complaints also allege that both brokers engaged in unauthorized trading and concealed material information from their customers about the transaction costs associated with their recommendations, which were likely to outstrip any potential monetary gains in the accounts.  

The case follows similar charges of excessive trading by brokers brought in JanuarySeptember, and December 2017. The SEC previously issued an Investor Alert warning about excessive trading and churning that can occur in brokerage accounts.

The SEC’s complaints charge Botvinnik and Aquino with violations of antifraud provisions of the federal securities laws.

The SEC’s investigation was conducted by Yael Berger, Jacqueline O’Reilly, Pamela Nolan, and Gregory Bockin, with assistance from Michael Fioribello. The litigation will be led by Mr. Bockin, Ms. Berger, Ms. O’Reilly, and Samantha Williams. The case is being supervised by Ms. Chion, Stacy Bogert, and Cheryl Crumpton.

This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates Law Group, P.A provides ongoing corporate and securities counsel to private companies and public companies listed and publicly traded on the Frankfurt Stock Exchange, London Stock Exchange, NASDAQ Stock Market, the NYSE MKT and OTC Markets. For two decades the Firm has served private and public companies and other market participants in corporate law matters, securities law and going public matters. The firm’s practice areas include, but are not limited to, forensic law and investigations, SEC investigations and SEC defense, corporate law matters, compliance with the Securities Act of 1933 securities offer and sale and registration statement requirements, including Regulation A/ Regulation A+ , private placement offerings under Regulation D including Rule 504 and Rule 506 and Regulation S and PIPE Transactions as well as registration statements on Forms S-1, Form F-1, Form S-8 and Form S-4; compliance with the reporting requirements of the Securities Exchange Act of 1934, including Form 8-A and Form 10 registration statements, reporting on Forms 10-Q, Form 10-K and Form 8-K, Form 6-K and SEC Schedule 14CInformation and SEC Schedule 14A Proxy Statements; Regulation A / Regulation A+ offerings; all forms of going public transactions; mergers and acquisitions; applications to and compliance with the corporate governance requirements of national securities exchanges including NASDAQ and NYSE MKT and foreign listings; crowdfunding; corporate; and general contract and business transactions. The firm provides preparation of corporate documents and other transaction documents such as share purchase and exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. The firm prepares the necessary documentation and assists in completing the requirements of federal and state securities laws such as FINRA and DTC for Rule 15c2-11 / Form 211 trading applications, corporate name changes, reverse and forward splits, changes of domicile and other transactions. The firm represents clients in London, Dubai, India, Germany, India, France, Israel, Canada and throughout the U.S.