Broker-Dealer Litigation - Greenberg Traurig LLP

permit day traders at the broker-dealer to trade ahead of institutional orders. The Commission
barred Malin from association, with the right to reapply after one year.
In re Shankar, Release No. 64714, 2011 SEC LEXIS 2185 (June 21, 2011).
Q.1.e(i)
The Commission accepted an offer of settlement from Shankar, a registered
representative and proprietary trader of a registered broker-dealer. In two earlier actions brought
by the Commission, a federal district court entered a final judgments by consent against Shankar,
permanently enjoining him from future violations of the antifraud provisions of the federal
securities laws. The Commission’s complaints alleged that Shankar was tipped material,
nonpublic information concerning five companies and that he traded on the information and also
tipped certain of the information to others. In a related criminal proceeding in federal district
court, Shankar pleaded guilty to one count of conspiracy to commit securities fraud and one
count of securities fraud. The Commission barred Shankar from association and from
participating in any offering of penny stock.
Q.1.e(i)
SEC v. Galleon Mgmt. LP, Litig. Release No. 22021, 2011 SEC LEXIS 2258 (S.D.N.Y. June 30,
2011).
A federal district court entered judgment against Plate, a registered representative and
proprietary trader of a registered broker-dealer (the “Firm”). In a related criminal case, Plate
previously pleaded guilty to charges of securities fraud and conspiracy to commit securities
fraud. The Commission’s complaint alleged that Plate, upon being tipped inside information,
traded ahead of an impending acquisition announcement in a Firm account he managed. The
court permanently enjoined Plate from further violations of the antifraud provisions of the
federal securities laws and ordered him to pay $43,876 in disgorgement plus $9,416 in
prejudgment interest. The judgment provided that the court would determine civil penalty issues
at a later date.
Q.1.e(i)
In re Janney Montgomery Scott LLC, Release No. 64855, 2011 SEC LEXIS 3166 (July 11,
2011).
The Commission accepted an offer of settlement from Janney Montgomery Scott LLC, a
dually-registered broker-dealer and investment adviser (the “Firm”). The Commission alleged
that the Firm failed to adhere to its policy requiring a member of the Compliance Department or
Legal Department to attend meetings between investment bankers and research analysts, and
failed to properly maintain and enforce its email communication firewall procedures.
Additionally, the Commission alleged that beginning in 2005, the Firm began using research
analysts to help investment bankers explore new business opportunities, yet did not revise its
policies and procedures to prevent the possible misuse of material, nonpublic information. The
Commission also alleged that the Firm failed to adequately monitor trading in the securities of
firms on its Watch List, allowed a compliance employee to conduct supervisory reviews of pre-
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