KOSS CORPORATION

(KOSS)
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Delayed Nasdaq  -  04:00 2022-07-01 pm EDT
6.700 USD   -3.60%
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TradeZero settles SEC charges it misled customers about meme stock trading halts

05/24/2022 | 03:45pm EDT
FILE PHOTO: Signage is seen at the headquarters of the U.S. Securities and Exchange Commission (SEC) in Washington, D.C., U.S.

NEW YORK, May 24 (Reuters) - The U.S. Securities and Exchange Commission on Tuesday said the online brokerage TradeZero America Inc and its co-founder settled civil charges they falsely told customers that they did not restrict purchases of volatile "meme" stocks last year.

The settlement calls for TradeZero and Daniel Pipitone, 47, both from the New York City borough of Brooklyn, to retain an independent compliance consultant for two years and pay respective penalties of $100,000 and $25,000, without admitting wrongdoing.

Lawyers for the defendants did not immediately respond to requests for comment.

The case arose from last year's social media-fueled frenzy for stocks such as AMC Entertainment Holdings Inc, GameStop Corp and Koss Corp, from investors using online forums such as Reddit and Twitter.

According to the SEC, TradeZero halted trading in AMC, GameStop and Koss for about 10 minutes on Jan. 28, 2021, at the direction of its clearing broker, but later told investors it had resisted the halts.

The SEC said Pipitone said in an "Ask Me Anything" session on Reddit that "our clearing firm tried to make us block you and we refused" and that he told the clearing broker "theres NO WAY we are shutting these off." It also said TradeZero issued a press release promoting its resistance to trading restrictions.

Over a 36-hour period including the trading halt, Pipitone's statements and the press release, TradeZero new account applications were more than 200 times its daily average over the prior year, the SEC said.

"This case sends a powerful message that participants in our capital markets cannot exploit market turbulence to deceive customers," Melissa Hodgman, associate director of the SEC's enforcement division, said in a statement.

(Reporting by Jonathan Stempel in New York Editing by Matthew Lewis)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
AMC ENTERTAINMENT HOLDINGS, INC. -0.15% 13.53 Delayed Quote.-50.26%
GAMESTOP CORP. 0.92% 123.42 Delayed Quote.-16.83%
KOSS CORPORATION -3.60% 6.7 Delayed Quote.-34.93%
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Financials (USD)
Sales 2021 19,5 M - -
Net income 2021 0,49 M - -
Net cash 2021 4,64 M - -
P/E ratio 2021 464x
Yield 2021 -
Capitalization 61,3 M 61,3 M -
EV / Sales 2020 0,50x
EV / Sales 2021 9,88x
Nbr of Employees 34
Free-Float 43,7%
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Managers and Directors
Michael J. Koss Director
Kim M. Schulte Chief Financial Officer & Secretary
Lenore E. Lillie Vice President-Operations
Thomas L. Doerr Lead Independent Director
Theodore Halstead Nixon Independent Director
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