SEC Alleges TradeZero Deceived Customers on January 2021 Meme Stock Restrictions
May 24 2022 - 4:04PM
Dow Jones News
By Josh Beckerman
The Securities and Exchange Commission alleges that TradeZero
America Inc. and co-founder Daniel Pipitone deceived customers
about restricting meme stock purchases in January 2021.
Trading platform TradeZero and Mr. Pipitone agreed to a
cease-and-desist order, without admitting or denying the charges,
the SEC said. The order includes penalties of $100,000 for
TradeZero and $25,000 for Mr. Pipitone.
In October, TradeZero said it would combine with blank-check
company Dune Acquisition Corp., but Dune said May 3 that it
determined the deal "is not advisable or fair to, or in the best
interest of, Dune and its stockholders" and called for Dune
stockholders to vote against the transaction.
The SEC order said that on Jan. 28, 2021, "TradeZero's clearing
broker instructed all of its introducing brokers, including
TradeZero, to halt all purchases in GME, AMC, and KOSS."
"TradeZero refused to implement this instruction for over two
hours, allowing its customers to freely trade. Under increasing
pressure from the clearing broker," TradeZero's board decided to
implement the restriction, the order said. "TradeZero ultimately
halted purchases for about 10 minutes," according to an SEC press
release.
According to the order, Mr Pipitone said on Reddit "that some
trading firms are blocking these symbols is disgusting,
unprecedented" and didn't disclose that TradeZero also blocked
three symbols. The order also mentioned a Jan. 29, 2021, TradeZero
press release "promoting its resistance to the clearing broker's
restrictions."
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
May 24, 2022 15:49 ET (19:49 GMT)
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