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Court Enters Final Judgment Against Former Broker-Dealer

Published Feb 05, 2017

On January 27, 2017, the U.S. District Court for the District of New Jersey entered a judgment against former broker-dealer Hold Brothers Online Investment Services, LLC, now known as Tafferer Trading, LLC, ordering Hold Brothers to pay more than $700,000 to settle claims that it failed to pay disgorgement, prejudgment interest and a civil penalty ordered by the SEC.

On September 25, 2012, the SEC instituted settled administrative and cease-and-desist proceedings finding that Hold Brothers had violated the federal securities laws by enabling and failing to adequately monitor deceptive trading practices by certain offshore traders who used its systems. The SEC's order required Hold Brothers to pay approximately $2.5 million in disgorgement, civil penalties, and interest, in five installments. Hold Brothers made only the first payment installment before ceasing its broker-dealer operations and defaulting on more than $2 million still owed under the SEC's order.

On November 21, 2014, the SEC filed an application in federal court in New Jersey seeking an order commanding Hold Brothers to pay the unpaid balance of disgorgement, civil penalty and post-order interest, and holding Gregory Hold and Steven Hold, the owners of Hold Brothers, jointly and severally liable as control persons for culpably causing Hold Brothers' failure to comply with the SEC's order.

Hold Brothers consented to the entry of a judgment enforcing the SEC consent order, finding Hold Brothers liable for $2,116,998.69 in disgorgement, civil penalties, and interest, and ordering Hold Brothers to pay $707,764.22 in partial satisfaction of that judgment. The judgment also provides that the SEC will dismiss its claim against Gregory Hold upon receipt of this payment. The SEC has also agreed to dismiss its claim against Steven Hold.

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