On November 9, 2018, the Securities and Exchange Commission obtained a judgment against the former CEO of a brokerage consulting business who was charged by the SEC in August for his role in a multimillion dollar transition management fraud.

The SEC previously charged a brokerage consulting business known as GTS along with three of its former officers, including former CEO John T. Place, for misleading current and prospective customers about the fees the business charged in connection with securities transactions. According to the SEC’s complaint, Place and other GTS officers told many of their customers that GTS would receive only clearly disclosed commissions charged on customers’ trades. In reality, GTS also received additional revenue from mark-ups and mark-downs charged by other brokers.

Without admitting or denying the allegations in the SEC’s complaint, Place consented to the entry of a judgment permanently enjoining him from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 15(c)(1) of the Exchange Act. The amount of any financial penalty and disgorgement to be imposed against Place will be determined at a later date by the court upon motion of the SEC. Place also consented to the entry of an SEC order, issued on December 20, 2018, barring him from the securities industry. The SEC resolved its lawsuit against the two entities that comprised GTS in April 2017, obtaining a final judgment against GTS Inc. and dismissing the action against the defunct GTS LLC.

The SEC’s investigation was conducted by Ellen F. Bortz and Richard E. Johnston under the supervision of Jennifer S. Leete. The SEC’s litigation is being led by Daniel J. Maher and Melissa J. Armstrong.