U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23840 / May 24, 2017
Securities and Exchange Commission v. Nathanial D. Ponn, No. 16-civ-10624 (D. Mass. filed Mar. 31, 2016)
United States v. Nathanial D. Ponn, No. 1:16-cr-10245 (D. Mass. filed Mar. 31, 2016)
Court Enters Final Judgment Against Massachusetts Man for Scheme to Defraud Numerous Broker-Dealers
On May 23, 2017, the U.S. District Court for the District of Massachusetts entered a final judgment against Nathaniel D. Ponn in a case filed by the in March 2016 alleging that Ponn defrauded numerous broker-dealers. Among other things, the judgment prohibits Ponn from opening new brokerage accounts in the future unless he provides the brokerage firm with a copy of the SEC’s complaint against him and a copy of the judgment entered against him.
According to the SEC’s complaint, filed on March 31, 2016 in federal court in Massachusetts, beginning as early as 2007, but escalating in 2014 and continuing into at least April 2015, Ponn defrauded numerous brokerage firms through bogus bank transfers to newly opened brokerage accounts that created the false appearance the brokerage accounts would have cash available upon the settlement of Ponn’s purchases of stocks and mutual fund shares. Ponn used temporary credits from the bogus transfers to purchase stock and mutual fund shares, which he repeatedly attempted to cash out or transfer to other financial institutions before the brokerages discovered that Ponn did not have actual money to fund the bank transfers.
Ponn consented to the entry of a final judgment permanently enjoining him from violating Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder. He also consented to a conduct-based injunction enjoining him from opening a brokerage account without providing to the relevant broker a copy of the Commission’s complaint in this case and a copy of the Final Judgment entered against him.
On March 1, 2017, Ponn was sentenced to 15 months imprisonment in a related criminal case. In addition, the Court in the criminal case ordered Ponn to pay over $20,000 in restitution to three brokerage firms for losses caused by his fraudulent conduct.
The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Massachusetts and the Federal Bureau of Investigation.
For further information, please see Litigation Releases No. 23508 (March 31, 2016), No. 23701 (December 8, 2016) and No. 23770 (March 6, 2017).
https://www.sec.gov/litigation/litreleases/2017/lr23840.htm