SEC v. Joel David Castro Leon; and Shmuel A. Sherr, No. 2:24-cv-09214, District of New Jersey (Sept. 17, 2024) — Complaint

Counsel of Record:
Judson T. Mihok
Gregory R. Bockin
Joseph G. Sansone
Julia C. Green
SECURITIES AND EXCHANGE COMMISSION
Philadelphia Regional Office
1617 JFK Boulevard, Suite 520
Philadelphia, PA 19103
Phone: 215-597-6500
Fax: 215-597-2740
Email: [email protected]

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

       :
SECURITIES AND EXCHANGE       :
COMMISSION,                                                            :                        Civil            Action            No.
       :
    Plaintiff,  : COMPLAINT
       :
   v.    :  JURY TRIAL DEMANDED
       :
JOEL DAVID CASTRO LEON and    :
SHMUEL            A.            SHERR,                                                :
       :
                                                Defendants.                        :
       :

COMPLAINT
 Plaintiff Securities and Exchange Commission (the “Commission”), One Penn Center,
1617 JFK Boulevard, Suite 520, Philadelphia, Pennsylvania 19103, files this Complaint against
Defendants Joel David Castro Leon (“Leon”), whose last known address is Diskin 1, Jerusalem,
Israel, and Shmuel A. Sherr, whose last known address is 37 Sderot Ben Tsvi, Israel, both of
whom are also c/o Steven Y. Yurowitz, YurowitzLaw PLLC, 950 Third Avenue, 31st Floor,
New York, NY 10022, and alleges as follows:

 
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SUMMARY OF THE ACTION
1. From at least July 2020 through May 2021 (the “Relevant Period”), Leon and
Sherr engaged in a fraudulent market manipulation scheme known as “spoofing,” where Leon
used Sherr’s brokerage accounts to manipulate the prices of approximately 50 stocks and
generate approximately $415,090 in ill-gotten gains for them to share.
2. Leon was the primary architect of the scheme and conducted all of the trading at
issue in Sherr’s brokerage accounts with Sherr’s permission.
3. Leon traded in Sherr’s accounts because multiple brokerage companies had closed
Leon’s accounts, and thus Leon was unable to trade in his own name.  Instead, Leon recruited
Sherr to open brokerage accounts so that Leon could trade.
4. Sherr agreed to assist Leon, opened two brokerage accounts in his own name, and
granted Leon access to those accounts without disclosing to the brokerage companies
(“Brokerage Company A” and “Brokerage Company B”) that Leon would be conducting the
trading.
5. Leon’s manipulative trading strategy allowed him to buy certain stocks at
artificially low prices and immediately sell them at artificially high prices.
6. Specifically, Leon, using Sherr’s accounts, placed multiple non-bona fide sell
orders for certain stocks that he did not intend to actually execute while simultaneously or
shortly thereafter placing bona fide buy orders that he did intend to have executed.  The purpose
of the non-bona fide sell orders was to lower the stock’s price by creating a false appearance of
selling interest or activity in the stock and to induce other market participants to execute against
Leon’s bona fide buy orders at artificially depressed prices (i.e., “buy low”).  Once Leon bought
the stock at artificially low prices, he canceled his open non-bona fide sell orders.

 
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7. After establishing this position, Leon manipulated the market once again so he
could fully capitalize on his “buy low, sell high” strategy.  He placed multiple non-bona fide buy
orders while simultaneously or shortly thereafter placing bona fide sell orders for the same stock
he had just purchased.  Leon’s non-bona fide buy orders created the false appearance of buying
interest or activity, which artificially inflated the price of the stock, and induced other traders to
execute against his bona fide sell orders at artificially inflated prices.
8. Leon and Sherr agreed to share the trading profits 90% to Leon and 10% to Sherr.
Together, they used the manipulative trading scheme described herein to reap $373,581 in ill-
gotten gains for Leon and $41,509 in ill-gotten gains for Sherr.
9. Their scheme came to an end because both brokerage companies terminated
Sherr’s accounts and Brokerage Company B, in particular, terminated his account after twice
identifying and confronting Sherr with examples of manipulative trading in his account.
10. While Leon conducted all of the trading, he would not have been able to do so
without Sherr’s knowledge and assistance.  Sherr knew Leon was unable to trade in his own
name, yet Sherr allowed Leon to trade in Sherr’s account at Brokerage Company B even after he
was confronted twice about the manipulative trading activities in his account.
11. By engaging in the spoofing scheme and as alleged further in this Complaint,
Leon violated, and unless enjoined will continue to violate, Sections 17(a)(1) and (3) of the
Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77q(a)(1) and (3)], and Sections 9(a)(2)
and 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78i(a)(2) and
78j(b)], and Rules 10b-5(a) and (c) thereunder [17 C.F.R. §§ 240.10b-5(a), (c)].
12. By engaging in the spoofing scheme and as alleged further in this Complaint,
Sherr violated, and unless enjoined will continue to violate, Sections 17(a)(1) and (3) of the

 
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Securities Act [15 U.S.C. §§ 77q(a)(1) and (3)], and Section 10(b) of the Exchange Act [15
U.S.C. § 78j(b)] and Rules 10b-5(a) and (c) thereunder [17 C.F.R. §§ 240.10b-5(a), (c)], and
aided and abetting Leon’s violation of Section 9(a)(2) of the Exchange Act [15 U.S.C. §
78i(a)(2)].
JURISDICTION AND VENUE
13. The Commission brings this action, and this Court has subject matter jurisdiction
over this action, pursuant to Sections 20(b), 20(d), and 22(a) of the Securities Act [15 U.S.C. §§
77t(b), 77t(d), and 77v(a)], and Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§
78u(d), 78u(e), and 78aa].  Leon and Sherr, directly or indirectly, made use of the mails, or the
means and instrumentalities of interstate commerce, or the facilities of national securities
exchanges, in connection with the transactions, acts, practices, and courses of business alleged in
this complaint.
14. Venue is proper pursuant to Section 22(a) of the Securities Act [15 U.S.C. §
77v(a)] and Section 27 of the Exchange Act [15 U.S.C. §§ 78aa] because certain of the acts,
practices, transactions and courses of business constituting the alleged violations occurred within
the District of New Jersey.
DEFENDANTS
15. Joel David Castro Leon, age 41, is a resident of Jerusalem, Israel. He is currently
unemployed and has never held any securities licenses.
16. Shmuel A. Sherr, age 34, is a resident of Jerusalem, Israel. He is a student and
massage therapist and has never held any securities licenses.

 
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TERMS USED IN THIS COMPLAINT
17. The term spoofing refers to a type of market manipulation scheme that involves
placing non-bona fide orders to create a false appearance of new or increased trading interest in a
particular security and is intended to induce market participants to place orders priced at or better
than the spoofer’s non-bona fide orders.  This conduct creates artificial market conditions that
benefit the spoofer’s interests while harming other market participants.
18. The term thinly traded securities refers to stocks that have low trading volume
and do not trade often.  As compared to more actively traded securities with greater trading
volume, thinly traded stocks often have few interested buyers and sellers and tend to be more
volatile because just a handful of trades can affect their market prices substantially.
19. The term national best bid (“NBB”) means the highest price a buyer is willing to
pay to buy a security.  The term national best offer (“NBO”) means the lowest price that a seller
is willing to accept to sell a security.  Collectively, the NBB and NBO are referred to as the
“NBBO.”
20. The term limit order refers to an order to buy or sell a security at a specific price
or better.  A buy limit order can only be executed at the limit price or lower, and a sell limit order
can only be executed at the limit price or higher.  A limit order is not guaranteed to execute.  A
limit order can only be executed if the stock’s market price reaches the limit price.  While limit
orders do not guarantee execution, they help ensure that an investor does not pay more than a
pre-determined price for a stock.
21. The term market order refers to an order to buy or sell a security immediately.
This type of order guarantees that the order will be executed, but does not guarantee the

 
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execution price.  A market order will execute at or near the NBB (for a sell order) or NBO (for a
buy order).
FACTS
A. Leon’s Former Brokerage Firms Terminated His Trading Privileges.
22. Leon previously owned brokerage accounts in his name and was able to trade in
them.
23. By the end of 2016, at least four brokerage companies where Leon owned
accounts unilaterally terminated his accounts.
B. Leon Recruited Sherr.
24. Leon met Sherr through a mutual friend in their Jerusalem neighborhood.
25. After they became friends, Leon approached Sherr with a proposal: because
Leon’s brokerage accounts had been terminated and he was unable to trade in his own name,
Leon asked Sherr to open brokerage accounts in Sherr’s name so that Leon could use those
brokerage accounts to trade stock.
26. Sherr agreed to this arrangement and the two agreed that they would share the
trading profits 90% to Leon and 10% to Sherr.
27. In accordance with their agreement, Sherr opened accounts at Brokerage
Company A and Brokerage Company B on April 26, 2020 and May 5, 2020, respectively, and
provided Leon with the login credentials so that Leon could trade in Sherr’s accounts.
28. Sherr granted Leon access to those accounts without disclosing to the brokerage
companies that Leon would be conducting the trading, despite, for example, telling Brokerage
Company B that no one other than Sherr had trading authority over the account.

 
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C. Leon Used Sherr’s Accounts to Engage in Manipulative Trading.
29. On an almost daily basis during the Relevant Period, Leon, using Sherr’s
accounts, carried out the spoofing scheme by manipulating the NBBO of certain stocks.
30. Leon’s spoofing strategy typically manipulated the prices of thinly traded stocks,
which are easier to manipulate due to their low trading volume.
31. For example, Leon placed non-bona fide limit sell orders visible to other market
participants that established new NBOs – incrementally narrowing the NBBO from the offer side
– to allow him to buy a security at an artificially low price.  Leon then purchased the security via
a market order.
32. After buying the security at the artificially low price, Leon canceled his visible
sell orders.
33. Then Leon repeated his spoofing from the buy side of the market to pump up the
price of the same security he had just purchased.  Specifically, Leon placed a series of visible,
non-bona fide limit buy orders that established a new NBB and walked the price of the security
up to a price point where he could sell the security for a quick profit.
34. Below is an example of Leon using Sherr’s account to spoof the sell side of a
particular security, Phathom Pharmaceutical, Inc. (“PHAT”) stock, on November 4, 2020:

 
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35. In this example, the grey area is the NBBO for PHAT stock. The spread for the
NBBO at 10:16 a.m. was a NBB of $41.00 per share and a NBO of $41.75 per share.
36. From 10:17 a.m. through 10:21 a.m., Leon placed eight non-bona fide, visible,
limit sell orders ranging from 100 to 900 shares from Sherr’s account to lower the NBO (as
indicated by the eight orange lines).
37. Each of these non-bona fide limit sell orders lowered the NBO.
38. Leon canceled six of these orders within seconds only to replace them with a
lower limit sell order until the NBO was lowered to $40.50 per share at 10:21 a.m., at which time
he executed five market orders to cumulatively buy almost 2,000 shares of PHAT stock below
$40.10 per share (as indicated by the green plus signs).
39. Leon continued his spoofing several more times within the next twenty minutes to
depress the NBO even further, culminating with six market orders to buy approximately an
additional 3,000 shares of PHAT stock below $39.40 per share, to accumulate a total of
approximately 5,000 shares by 10:40 a.m.
40. Leon then canceled the remaining non-bona fide limit sell orders and spoofed the
buy side to walk up the price of the NBB so he could sell the PHAT stock at artificially higher
prices, as demonstrated in the below graph.

 
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41. To increase the likelihood that the NBB for PHAT stock would stay at a price
point higher than the price at which he had just purchased the stock, Leon placed two non-bona
fide, visible, limit buy orders for 1,300 shares each that increased the NBB (as indicated by the
green lines).
42. Once the NBB rebounded to $41.00 at 10:54 a.m., which was the price point for
the stock before Leon began his manipulation, Leon began selling via market orders all 5,000
PHAT shares he had acquired earlier (as indicated by the orange plus signs). He executed these
market sell orders at price points between $41.00 per share and $41.44 per share.
43. Thus, within 50 minutes, Leon engaged in spoofing that enabled him to buy a
stock at artificially low prices and then repeated the process to enable him to sell the same stock
at artificially high prices.
44. Leon used Sherr’s accounts to engage in this manipulative trading scheme and
generate approximately $6,604 in just 50 minutes.   This example is just one of many instances
of spoofing activity.
D. Leon and Sherr Ignored Admonishments to Cease Spoofing.
45. Leon placed hundreds of manipulative orders while trading in Sherr’s brokerage
accounts.
46. Leon placed so many non-bona fide orders that Brokerage Company A terminated
Sherr’s account on May 26, 2020, just thirty days after it had been opened.
47. Leon, pretending to be Sherr, called Brokerage Company A to withdraw the funds
as soon as possible so he could use them to trade elsewhere – specifically Brokerage Company
B, where Sherr had already opened an account on May 5, 2020 at Leon’s instruction.

 
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48. On November 10, 2020, Brokerage Company B placed a trading restriction on
Sherr’s account after identifying suspicious trading.
49. Sherr and Leon agreed that Sherr would call Brokerage Company B to remove the
restriction because Sherr believed Brokerage Company B’s voice recognition system would not
recognize Leon’s voice as the account holder.  Leon instructed Sherr on how to explain the
suspicious trading so that Brokerage Company B would lift the trading restriction.
50. On November 10, 2020, Sherr called Brokerage Company B and asked that the
restriction be removed from his account.  A representative from Brokerage Company B told
Sherr that the trading in his account was improper and could be considered manipulative.  The
representative instructed Sherr to immediately cease trading in the manner identified.
51. Sherr misrepresented to the Brokerage Company B representative that he was the
person who performed the trades at issue.  He further stated, at Leon’s direction, that he would
comply with the instructions, and the restriction was lifted.
52. But Sherr continued to grant Leon access to his account, and Leon continued the
spoofing scheme.
53. On April 22, 2021, Brokerage Company B confronted Sherr again after detecting
more manipulative trading in Sherr’s account. Leon again coached Sherr on how to respond to
avoid a trading restriction.
54. Brokerage Company B eventually terminated the account’s trading privileges on
June 28, 2021.
E. Leon and Sherr Profited Over $415,000 From Their Manipulative Trading.
55. In total, Leon used Sherr’s accounts to engage in manipulative trading in
approximately 50 securities over at least a ten-month period.

 
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56. Their scheme generated illicit profits of at least approximately $415,090, with
90% (approximately $373,581) going to Leon and the remaining 10% (approximately $41,509)
going to Sherr.
FIRST CLAIM FOR RELIEF
Fraud in Violation of Sections 17(a)(1) and (3) of the Securities Act
(Against Both Defendants)
57. The Commission realleges and incorporates by reference each and every
allegation in paragraphs 1 through 56, inclusive, as if they were fully set forth herein.
58. By virtue of the foregoing, Defendants, directly or indirectly, singly or in concert,
in the offer or sale of securities, and by the use of the means of instruments of transportation or
communication in interstate commerce or the mails:
a. Knowingly or recklessly employed one or more devices, schemes or artifices to
defraud; and
b. Knowingly, recklessly, or negligently engaged in one or more transactions,
practices or courses of business which operated or would operate as a fraud or
deceit upon the purchaser.
59. By virtue of the foregoing, Defendants violated and, unless restrained and
enjoined, will again violate, Sections 17(a)(1) and (3) of the Securities Act [15 U.S.C. §§
77q(a)(1) and (3)].
SECOND CLAIM FOR RELIEF
Fraud in Violation of Section 10(b) of the Exchange Act and
Rules 10b-5(a) and (c) thereunder
(Against Both Defendants)
60. The Commission realleges and incorporates by reference each and every
allegation in paragraphs 1 through 56, inclusive, as if they were fully set forth herein.

 
12 
 
61. By virtue of the foregoing, Defendants directly or indirectly, singly or in concert,
in connection with the purchase or sale of a security, by use of the means or instruments of
interstate commerce, or of the mails, or the facilities of a national securities exchange, knowingly
or recklessly:
a. Employed one or more devices, schemes, or artifices to defraud; and
b. Engaged in acts, practices, or courses of business which operated or would
operate as a fraud or deceit upon others.
62. By virtue of the foregoing, Defendants violated and, unless restrained and
enjoined, will again violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rules
10b-5(a) and (c) [17 C.F.R. §§ 240.10b-5(a), (c)] thereunder.
THIRD CLAIM FOR RELIEF
Violation of Section 9(a)(2) of the Exchange Act
(Against Leon)
63. The Commission realleges and incorporates by reference each and every
allegation in paragraphs 1 through 56, inclusive, as if they were fully set forth herein.
64. By virtue of the foregoing, Leon, directly or indirectly, by the use of the mails or
any means or instrumentality of interstate commerce, or of any facility of any national securities
exchange, effected, alone or with one or more other persons, a series of transactions in a security
creating actual or apparent active trading in such security, or raising or depressing the price of
such security, for the purpose of inducing the purchase or sale of such security by others.
65. By reason of the foregoing, Leon violated and, unless enjoined, will again violate
Exchange Act Section 9(a)(2) [15 U.S.C. § 78i(a)(2)].

 
13 
 
FOURTH CLAIM FOR RELIEF
Aiding and Abetting Violation of Section 9(a)(2) of the Exchange Act
(Against Sherr)
66. The Commission realleges and incorporates by reference each and every
allegation in paragraphs 1 through 56, inclusive, as if they were fully set forth herein.
67. By virtue of the foregoing, Sherr knowingly provided substantial assistance to
Leon, who directly or indirectly, by the use of the mails or means or instrumentalities of
interstate commerce, or of a facility of a national securities exchange, effected, alone or with one
or more other persons, a series of transactions in securities creating actual or apparent active
trading in such securities, or raising or depressing the price of such securities, for the purpose of
inducing the purchase or sale of such securities by others.
68. By reason of the foregoing, Sherr aided and abetted Leon’s violations of, and
unless enjoined, will again aid and abet violations of, Exchange Act Section 9(a)(2) [15 U.S.C. §
78i(a)(2)].
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that this Court enter a Final
Judgment:
I.
Permanently restraining and enjoining Leon and Sherr and their agents, servants,
employees, and all persons in active concert or participation with them who receive actual notice
of the injunction by personal service or otherwise from, directly or indirectly, engaging in
conduct in violation of the federal securities laws alleged in this Complaint;

 
14 
 
II.
Ordering Defendants to disgorge, with prejudgment interest, all illicit trading profits or
other ill-gotten gains received, directly or indirectly, as a result of the conduct alleged in this
Complaint, pursuant to Section 21(d)(3), (5) and (7) of the Exchange Act [15 U.S.C. §§
78u(d)(3), (5) and (7)];
III.
Ordering Leon and Sherr to pay a civil monetary penalty pursuant to
 Section 20(d) of the
Securities Act [15 U.S.C. § 77t(d)]; and Section 21(d)(3) of the Exchange Act [15 U.S.C. §
78u(d)(3)];
IV.
Enjoining Leon, for a period of five years, from, directly or indirectly, opening,
maintaining or trading in any brokerage account(s) in his name, the names of any immediate
family members, the names of any company over which he has any control or the names of any
third party individual(s), without providing the relevant broker-dealer(s) a copy of the complaint
and final judgment entered against him in this action, pursuant to Section 20(b) of the Securities
Act [15 U.S.C. § 77t(b)] and Sections 21(d)(1) and (5) of the Exchange Act [15 U.S.C. §§
78u(d)(1) & (5)];
V.
Enjoining Sherr, for a period of three years, from, directly or indirectly, opening,
maintaining or trading in any brokerage account(s) in his name, the names of any immediate
family members, the names of any company over which he has any control or the names of any
third party individual(s), without providing the relevant broker-dealer(s) a copy of the complaint
and final judgment entered against him in this action, pursuant to Section 20(b) of the Securities

 
15 
 
Act [15 U.S.C. § 77t(b)] and Sections 21(d)(1) and (5) of the Exchange Act [15 U.S.C. §§
78u(d)(1) & (5)]; and
VI.
Granting such other and further relief as the Court may deem just and proper.
JURY DEMAND
Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff demands that this
case be tried before a jury.
Respectfully submitted,
Date:   September 17, 2024 /s/Judson T. Mihok
Judson T. Mihok
Gregory R. Bockin
Joseph G. Sansone
Julia C. Green
Attorneys for Plaintiff:
S
ECURITIES AND EXCHANGE COMMISSION
Philadelphia Regional Office
1617 JFK Boulevard, Suite 520
Philadelphia, PA  19103
215-597-3100 (phone)
215-597-2740 (fax)
[email protected]

 
 
LOCAL RULE 11.2 CERTIFICATION

Pursuant to Local Rule 11.2, I certify that the matter in controversy alleged against the
Defendants in the foregoing Complaint is not the subject of any other civil action pending in any
court, or of any pending arbitration or administrative proceeding.

Date: September 17, 2024    Respectfully submitted,

/s/Judson T. Mihok
Judson T. Mihok
Gregory R. Bockin
Joseph G. Sansone
Julia C. Green
Attorneys for Plaintiff:
S
ECURITIES AND EXCHANGE COMMISSION
Philadelphia Regional Office
1617 JFK Boulevard, Suite 520
Philadelphia, PA  19103
215-597-3100 (phone)
215-597-2740 (fax)
[email protected]
 
 
 

 
 
Counsel of Record:
Judson T. Mihok
Gregory R. Bockin
Joseph G. Sansone
Julia C. Green
SECURITIES AND EXCHANGE COMMISSION
Philadelphia Regional Office
1617 JFK Boulevard, Suite 520
Philadelphia, PA 19103
Phone: 215-597-65003100 (phone)
Fax: 215-597-2740
Email: [email protected]

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

       :
SECURITIES AND EXCHANGE       :
COMMISSION,     :
                                                                                    :            Civil            Action            No.            _________
    Plaintiff,  :
       : DESIGNATION OF AGENT FOR
   v.    : SERVICE
       :
JOEL DAVID CASTRO LEON and    :
SHMUEL            A.            SHERR,                                                :
       :
                                                Defendants.                        :
       :

Pursuant to Local Rule 101.1(f), because the Securities and Exchange Commission (the
“Commission”) does not have an office in this district, the United States Attorney for the District
of New Jersey is hereby designated as eligible as an alternative to the Commission to receive
service of all notices or papers in the captioned action. Therefore, service upon the United States
or its authorized designee, David Dauenheimer, Deputy Chief, Civil Division, United States
Attorney’s Office for the District of New Jersey, 970 Broad Street, 7th Floor, Newark, NJ 07102
shall constitute Service upon the Commission for purposes of this action.

 2 
Date:  September 17, 2024 /s/Judson T. Mihok
Judson T. Mihok
Gregory R. Bockin
Joseph G. Sansone
Julia C. Green
Attorneys for Plaintiff:
S
ECURITIES AND EXCHANGE COMMISSION
Philadelphia Regional Office
1617 JFK Boulevard, Suite 520
Philadelphia, PA  19103
Phone: 215-597-6500
Fax: 215-597-2740
Email: [email protected]

JS 44   (Rev. 04/21)
CIVIL COVER SHEET
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as
provided by local rules of court.  This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the
purpose of initiating the civil docket sheet.    (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)
I.
(a)PLAINTIFFSDEFENDANTS
(b)
County of Residence of First Listed Plaintiff
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(Place an “X” in One Box for Plaintiff
and One Box for Defendant)
(For Diversity Cases Only)
1U.S. Government3Federal Question
PTFDEFPTFDEF
Plaintiff
(U.S. Government Not a Party)
Citizen of This State1
1Incorporated
or
Principal Place44
of Business In This State
2U.S. Government4DiversityCitizen of Another State22Incorporated
and
Principal Place55
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(Indicate Citizenship of Parties in Item III)
of Business In Another State
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CONTRACTTORTSFORFEITURE/PENALTYBANKRUPTCYOTHER STATUTES
110 Insurance
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625 Drug Related Seizure422 Appeal 28 USC 158375 False Claims Act
120 Marine310 Airplane365 Personal Injury  -of Property 21 USC 881423 Withdrawal376 Qui Tam (31 USC
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835 Patent - Abbreviated
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Other550 Civil RightsActionsState Statutes
448 Education555 Prison Condition
560 Civil Detainee -
Conditions of
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V.  ORIGIN
(Place an “X” in One Box Only)
1Original
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6Multidistrict
Litigation -
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8  Multidistrict
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Direct File
VI.  CAUSE OF ACTION
Brief description of cause:
VII.  REQUESTED IN
COMPLAINT:
CHECK IF THIS IS A
CLASS ACTION
UNDER RULE 23, F.R.Cv.P.
DEMAND $
CHECK YES only if demanded in complaint:
JURY DEMAND:
YesNo
VIII.  RELATED CASE(S)
IF ANY
(See instructions):
JUDGEDOCKET NUMBER
DATESIGNATURE OF ATTORNEY OF RECORD
FOR OFFICE USE ONLY
RECEIPT #AMOUNTAPPLYING IFPJUDGEMAG. JUDGE
26 USC 7609
INTELLECTUAL
X
X
X
X
s/Judson T. Mihok
9/17/2024
Joel David  Castro Leon and Shmuel A. Sherr
Steven Y. Yurowitz
YurowitzLaw PLLC
950 Third Avenue, 31st. Floor, New York, NY 10022
Judson T. Mihok
U.S. Securities and Exchange Commission
1617 JFK Boulevard, Suite 520, Philadelphia, PA 19103 (215)597-6500
Securities Fraud
Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity)
:
15 U.S.C. §§ 77q(a)(1) and (3);
15 U.S.C. § 78j(b), and
1
7 C.F.R. §§ 240.10b-5(a), (c);
15 U.S.C. § 78i(a)(2)
U.S. Securities and Exchange Commission

Counsel of Record: 
Judson T. Mihok 
Gregory R. Bockin 
Joseph G. Sansone 
Julia C. Green 
SECURITIES AND EXCHANGE COMMISSION 
Philadelphia Regional Office 
1617 JFK Boulevard, Suite 520 
Philadelphia, PA 19103 
Phone: 215-597-6500 
Fax: 215-597-2740 
Email: [email protected] 

 
UNITED STATES DISTRICT COURT  

DISTRICT OF NEW JERSEY 
        
       : 
SECURITIES AND EXCHANGE   : 
COMMISSION,     :  Civil Action No. 
       :  
    Plaintiff,  : COMPLAINT 
       :  
   v.    :  JURY TRIAL DEMANDED 
       : 
JOEL DAVID CASTRO LEON and    : 
SHMUEL A. SHERR,    : 
       : 
    Defendants.  : 
       : 

 
COMPLAINT 

 Plaintiff Securities and Exchange Commission (the “Commission”), One Penn Center, 

1617 JFK Boulevard, Suite 520, Philadelphia, Pennsylvania 19103, files this Complaint against 

Defendants Joel David Castro Leon (“Leon”), whose last known address is Diskin 1, Jerusalem, 

Israel, and Shmuel A. Sherr, whose last known address is 37 Sderot Ben Tsvi, Israel, both of 

whom are also c/o Steven Y. Yurowitz, YurowitzLaw PLLC, 950 Third Avenue, 31st Floor, 

New York, NY 10022, and alleges as follows: 

  

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SUMMARY OF THE ACTION 

1. From at least July 2020 through May 2021 (the “Relevant Period”), Leon and 

Sherr engaged in a fraudulent market manipulation scheme known as “spoofing,” where Leon 

used Sherr’s brokerage accounts to manipulate the prices of approximately 50 stocks and 

generate approximately $415,090 in ill-gotten gains for them to share. 

2. Leon was the primary architect of the scheme and conducted all of the trading at 

issue in Sherr’s brokerage accounts with Sherr’s permission. 

3. Leon traded in Sherr’s accounts because multiple brokerage companies had closed 

Leon’s accounts, and thus Leon was unable to trade in his own name.  Instead, Leon recruited 

Sherr to open brokerage accounts so that Leon could trade. 

4. Sherr agreed to assist Leon, opened two brokerage accounts in his own name, and 

granted Leon access to those accounts without disclosing to the brokerage companies 

(“Brokerage Company A” and “Brokerage Company B”) that Leon would be conducting the 

trading.  

5. Leon’s manipulative trading strategy allowed him to buy certain stocks at 

artificially low prices and immediately sell them at artificially high prices. 

6. Specifically, Leon, using Sherr’s accounts, placed multiple non-bona fide sell 

orders for certain stocks that he did not intend to actually execute while simultaneously or 

shortly thereafter placing bona fide buy orders that he did intend to have executed.  The purpose 

of the non-bona fide sell orders was to lower the stock’s price by creating a false appearance of 

selling interest or activity in the stock and to induce other market participants to execute against 

Leon’s bona fide buy orders at artificially depressed prices (i.e., “buy low”).  Once Leon bought 

the stock at artificially low prices, he canceled his open non-bona fide sell orders. 

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7. After establishing this position, Leon manipulated the market once again so he 

could fully capitalize on his “buy low, sell high” strategy.  He placed multiple non-bona fide buy 

orders while simultaneously or shortly thereafter placing bona fide sell orders for the same stock 

he had just purchased. Leon’s non-bona fide buy orders created the false appearance of buying 

interest or activity, which artificially inflated the price of the stock, and induced other traders to 

execute against his bona fide sell orders at artificially inflated prices.  

8. Leon and Sherr agreed to share the trading profits 90% to Leon and 10% to Sherr. 

Together, they used the manipulative trading scheme described herein to reap $373,581 in ill-

gotten gains for Leon and $41,509 in ill-gotten gains for Sherr.   

9. Their scheme came to an end because both brokerage companies terminated 

Sherr’s accounts and Brokerage Company B, in particular, terminated his account after twice 

identifying and confronting Sherr with examples of manipulative trading in his account. 

10. While Leon conducted all of the trading, he would not have been able to do so 

without Sherr’s knowledge and assistance.  Sherr knew Leon was unable to trade in his own 

name, yet Sherr allowed Leon to trade in Sherr’s account at Brokerage Company B even after he 

was confronted twice about the manipulative trading activities in his account. 

11. By engaging in the spoofing scheme and as alleged further in this Complaint, 

Leon violated, and unless enjoined will continue to violate, Sections 17(a)(1) and (3) of the 

Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77q(a)(1) and (3)], and Sections 9(a)(2) 

and 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78i(a)(2) and 

78j(b)], and Rules 10b-5(a) and (c) thereunder [17 C.F.R. §§ 240.10b-5(a), (c)]. 

12. By engaging in the spoofing scheme and as alleged further in this Complaint, 

Sherr violated, and unless enjoined will continue to violate, Sections 17(a)(1) and (3) of the 

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Securities Act [15 U.S.C. §§ 77q(a)(1) and (3)], and Section 10(b) of the Exchange Act [15 

U.S.C. § 78j(b)] and Rules 10b-5(a) and (c) thereunder [17 C.F.R. §§ 240.10b-5(a), (c)], and 

aided and abetting Leon’s violation of Section 9(a)(2) of the Exchange Act [15 U.S.C. § 

78i(a)(2)]. 

JURISDICTION AND VENUE 

13. The Commission brings this action, and this Court has subject matter jurisdiction 

over this action, pursuant to Sections 20(b), 20(d), and 22(a) of the Securities Act [15 U.S.C. §§ 

77t(b), 77t(d), and 77v(a)], and Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 

78u(d), 78u(e), and 78aa].  Leon and Sherr, directly or indirectly, made use of the mails, or the 

means and instrumentalities of interstate commerce, or the facilities of national securities 

exchanges, in connection with the transactions, acts, practices, and courses of business alleged in 

this complaint. 

14. Venue is proper pursuant to Section 22(a) of the Securities Act [15 U.S.C. § 

77v(a)] and Section 27 of the Exchange Act [15 U.S.C. §§ 78aa] because certain of the acts, 

practices, transactions and courses of business constituting the alleged violations occurred within 

the District of New Jersey.   

DEFENDANTS 

15. Joel David Castro Leon, age 41, is a resident of Jerusalem, Israel. He is currently 

unemployed and has never held any securities licenses.  

16. Shmuel A. Sherr, age 34, is a resident of Jerusalem, Israel. He is a student and 

massage therapist and has never held any securities licenses. 

 

 

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TERMS USED IN THIS COMPLAINT 

17. The term spoofing refers to a type of market manipulation scheme that involves 

placing non-bona fide orders to create a false appearance of new or increased trading interest in a 

particular security and is intended to induce market participants to place orders priced at or better 

than the spoofer’s non-bona fide orders.  This conduct creates artificial market conditions that 

benefit the spoofer’s interests while harming other market participants. 

18. The term thinly traded securities refers to stocks that have low trading volume 

and do not trade often.  As compared to more actively traded securities with greater trading 

volume, thinly traded stocks often have few interested buyers and sellers and tend to be more 

volatile because just a handful of trades can affect their market prices substantially. 

19. The term national best bid (“NBB”) means the highest price a buyer is willing to 

pay to buy a security.  The term national best offer (“NBO”) means the lowest price that a seller 

is willing to accept to sell a security.  Collectively, the NBB and NBO are referred to as the 

“NBBO.”  

20. The term limit order refers to an order to buy or sell a security at a specific price 

or better.  A buy limit order can only be executed at the limit price or lower, and a sell limit order 

can only be executed at the limit price or higher.  A limit order is not guaranteed to execute.  A 

limit order can only be executed if the stock’s market price reaches the limit price.  While limit 

orders do not guarantee execution, they help ensure that an investor does not pay more than a 

pre-determined price for a stock.   

21. The term market order refers to an order to buy or sell a security immediately. 

This type of order guarantees that the order will be executed, but does not guarantee the 

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execution price.  A market order will execute at or near the NBB (for a sell order) or NBO (for a 

buy order).  

FACTS 

A. Leon’s Former Brokerage Firms Terminated His Trading Privileges. 

22. Leon previously owned brokerage accounts in his name and was able to trade in 

them. 

23. By the end of 2016, at least four brokerage companies where Leon owned 

accounts unilaterally terminated his accounts.  

B. Leon Recruited Sherr. 

24. Leon met Sherr through a mutual friend in their Jerusalem neighborhood.  

25. After they became friends, Leon approached Sherr with a proposal: because 

Leon’s brokerage accounts had been terminated and he was unable to trade in his own name, 

Leon asked Sherr to open brokerage accounts in Sherr’s name so that Leon could use those 

brokerage accounts to trade stock.  

26. Sherr agreed to this arrangement and the two agreed that they would share the 

trading profits 90% to Leon and 10% to Sherr.  

27. In accordance with their agreement, Sherr opened accounts at Brokerage 

Company A and Brokerage Company B on April 26, 2020 and May 5, 2020, respectively, and 

provided Leon with the login credentials so that Leon could trade in Sherr’s accounts. 

28. Sherr granted Leon access to those accounts without disclosing to the brokerage 

companies that Leon would be conducting the trading, despite, for example, telling Brokerage 

Company B that no one other than Sherr had trading authority over the account. 

 

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C. Leon Used Sherr’s Accounts to Engage in Manipulative Trading.  

29. On an almost daily basis during the Relevant Period, Leon, using Sherr’s 

accounts, carried out the spoofing scheme by manipulating the NBBO of certain stocks. 

30. Leon’s spoofing strategy typically manipulated the prices of thinly traded stocks, 

which are easier to manipulate due to their low trading volume.  

31. For example, Leon placed non-bona fide limit sell orders visible to other market 

participants that established new NBOs – incrementally narrowing the NBBO from the offer side 

– to allow him to buy a security at an artificially low price.  Leon then purchased the security via 

a market order.  

32. After buying the security at the artificially low price, Leon canceled his visible 

sell orders.  

33. Then Leon repeated his spoofing from the buy side of the market to pump up the 

price of the same security he had just purchased.  Specifically, Leon placed a series of visible, 

non-bona fide limit buy orders that established a new NBB and walked the price of the security 

up to a price point where he could sell the security for a quick profit.  

34. Below is an example of Leon using Sherr’s account to spoof the sell side of a 

particular security, Phathom Pharmaceutical, Inc. (“PHAT”) stock, on November 4, 2020: 

 

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35. In this example, the grey area is the NBBO for PHAT stock. The spread for the 

NBBO at 10:16 a.m. was a NBB of $41.00 per share and a NBO of $41.75 per share.  

36. From 10:17 a.m. through 10:21 a.m., Leon placed eight non-bona fide, visible, 

limit sell orders ranging from 100 to 900 shares from Sherr’s account to lower the NBO (as 

indicated by the eight orange lines).   

37. Each of these non-bona fide limit sell orders lowered the NBO.   

38. Leon canceled six of these orders within seconds only to replace them with a 

lower limit sell order until the NBO was lowered to $40.50 per share at 10:21 a.m., at which time 

he executed five market orders to cumulatively buy almost 2,000 shares of PHAT stock below 

$40.10 per share (as indicated by the green plus signs).  

39. Leon continued his spoofing several more times within the next twenty minutes to 

depress the NBO even further, culminating with six market orders to buy approximately an 

additional 3,000 shares of PHAT stock below $39.40 per share, to accumulate a total of 

approximately 5,000 shares by 10:40 a.m. 

40. Leon then canceled the remaining non-bona fide limit sell orders and spoofed the 

buy side to walk up the price of the NBB so he could sell the PHAT stock at artificially higher 

prices, as demonstrated in the below graph.  

 

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41. To increase the likelihood that the NBB for PHAT stock would stay at a price 

point higher than the price at which he had just purchased the stock, Leon placed two non-bona 

fide, visible, limit buy orders for 1,300 shares each that increased the NBB (as indicated by the 

green lines).  

42. Once the NBB rebounded to $41.00 at 10:54 a.m., which was the price point for 

the stock before Leon began his manipulation, Leon began selling via market orders all 5,000 

PHAT shares he had acquired earlier (as indicated by the orange plus signs). He executed these 

market sell orders at price points between $41.00 per share and $41.44 per share. 

43. Thus, within 50 minutes, Leon engaged in spoofing that enabled him to buy a 

stock at artificially low prices and then repeated the process to enable him to sell the same stock 

at artificially high prices.   

44. Leon used Sherr’s accounts to engage in this manipulative trading scheme and 

generate approximately $6,604 in just 50 minutes.   This example is just one of many instances 

of spoofing activity. 

D. Leon and Sherr Ignored Admonishments to Cease Spoofing. 

45. Leon placed hundreds of manipulative orders while trading in Sherr’s brokerage 

accounts.  

46. Leon placed so many non-bona fide orders that Brokerage Company A terminated 

Sherr’s account on May 26, 2020, just thirty days after it had been opened.  

47. Leon, pretending to be Sherr, called Brokerage Company A to withdraw the funds 

as soon as possible so he could use them to trade elsewhere – specifically Brokerage Company 

B, where Sherr had already opened an account on May 5, 2020 at Leon’s instruction.  

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48. On November 10, 2020, Brokerage Company B placed a trading restriction on 

Sherr’s account after identifying suspicious trading.  

49. Sherr and Leon agreed that Sherr would call Brokerage Company B to remove the 

restriction because Sherr believed Brokerage Company B’s voice recognition system would not 

recognize Leon’s voice as the account holder.  Leon instructed Sherr on how to explain the 

suspicious trading so that Brokerage Company B would lift the trading restriction.  

50. On November 10, 2020, Sherr called Brokerage Company B and asked that the 

restriction be removed from his account.  A representative from Brokerage Company B told 

Sherr that the trading in his account was improper and could be considered manipulative.  The 

representative instructed Sherr to immediately cease trading in the manner identified.  

51. Sherr misrepresented to the Brokerage Company B representative that he was the 

person who performed the trades at issue.  He further stated, at Leon’s direction, that he would 

comply with the instructions, and the restriction was lifted.  

52. But Sherr continued to grant Leon access to his account, and Leon continued the 

spoofing scheme.  

53. On April 22, 2021, Brokerage Company B confronted Sherr again after detecting 

more manipulative trading in Sherr’s account. Leon again coached Sherr on how to respond to 

avoid a trading restriction.  

54. Brokerage Company B eventually terminated the account’s trading privileges on 

June 28, 2021. 

E. Leon and Sherr Profited Over $415,000 From Their Manipulative Trading. 

55. In total, Leon used Sherr’s accounts to engage in manipulative trading in 

approximately 50 securities over at least a ten-month period.  

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56. Their scheme generated illicit profits of at least approximately $415,090, with 

90% (approximately $373,581) going to Leon and the remaining 10% (approximately $41,509) 

going to Sherr.   

FIRST CLAIM FOR RELIEF 
Fraud in Violation of Sections 17(a)(1) and (3) of the Securities Act 

(Against Both Defendants) 

57. The Commission realleges and incorporates by reference each and every 

allegation in paragraphs 1 through 56, inclusive, as if they were fully set forth herein.  

58. By virtue of the foregoing, Defendants, directly or indirectly, singly or in concert, 

in the offer or sale of securities, and by the use of the means of instruments of transportation or 

communication in interstate commerce or the mails: 

a. Knowingly or recklessly employed one or more devices, schemes or artifices to 

defraud; and 

b. Knowingly, recklessly, or negligently engaged in one or more transactions, 

practices or courses of business which operated or would operate as a fraud or 

deceit upon the purchaser.  

59. By virtue of the foregoing, Defendants violated and, unless restrained and 

enjoined, will again violate, Sections 17(a)(1) and (3) of the Securities Act [15 U.S.C. §§ 

77q(a)(1) and (3)]. 

SECOND CLAIM FOR RELIEF 
Fraud in Violation of Section 10(b) of the Exchange Act and  

Rules 10b-5(a) and (c) thereunder 
(Against Both Defendants) 

60. The Commission realleges and incorporates by reference each and every 

allegation in paragraphs 1 through 56, inclusive, as if they were fully set forth herein. 

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61. By virtue of the foregoing, Defendants directly or indirectly, singly or in concert, 

in connection with the purchase or sale of a security, by use of the means or instruments of 

interstate commerce, or of the mails, or the facilities of a national securities exchange, knowingly 

or recklessly: 

a. Employed one or more devices, schemes, or artifices to defraud; and 

b. Engaged in acts, practices, or courses of business which operated or would 

operate as a fraud or deceit upon others. 

62. By virtue of the foregoing, Defendants violated and, unless restrained and 

enjoined, will again violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rules 

10b-5(a) and (c) [17 C.F.R. §§ 240.10b-5(a), (c)] thereunder. 

THIRD CLAIM FOR RELIEF 
Violation of Section 9(a)(2) of the Exchange Act 

(Against Leon) 

63. The Commission realleges and incorporates by reference each and every 

allegation in paragraphs 1 through 56, inclusive, as if they were fully set forth herein. 

64. By virtue of the foregoing, Leon, directly or indirectly, by the use of the mails or 

any means or instrumentality of interstate commerce, or of any facility of any national securities 

exchange, effected, alone or with one or more other persons, a series of transactions in a security 

creating actual or apparent active trading in such security, or raising or depressing the price of 

such security, for the purpose of inducing the purchase or sale of such security by others. 

65. By reason of the foregoing, Leon violated and, unless enjoined, will again violate 

Exchange Act Section 9(a)(2) [15 U.S.C. § 78i(a)(2)]. 

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FOURTH CLAIM FOR RELIEF 
Aiding and Abetting Violation of Section 9(a)(2) of the Exchange Act 

(Against Sherr) 

66. The Commission realleges and incorporates by reference each and every 

allegation in paragraphs 1 through 56, inclusive, as if they were fully set forth herein. 

67. By virtue of the foregoing, Sherr knowingly provided substantial assistance to 

Leon, who directly or indirectly, by the use of the mails or means or instrumentalities of 

interstate commerce, or of a facility of a national securities exchange, effected, alone or with one 

or more other persons, a series of transactions in securities creating actual or apparent active 

trading in such securities, or raising or depressing the price of such securities, for the purpose of 

inducing the purchase or sale of such securities by others. 

68. By reason of the foregoing, Sherr aided and abetted Leon’s violations of, and 

unless enjoined, will again aid and abet violations of, Exchange Act Section 9(a)(2) [15 U.S.C. § 

78i(a)(2)]. 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that this Court enter a Final 

Judgment: 

I. 

Permanently restraining and enjoining Leon and Sherr and their agents, servants, 

employees, and all persons in active concert or participation with them who receive actual notice 

of the injunction by personal service or otherwise from, directly or indirectly, engaging in 

conduct in violation of the federal securities laws alleged in this Complaint; 

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II. 

Ordering Defendants to disgorge, with prejudgment interest, all illicit trading profits or 

other ill-gotten gains received, directly or indirectly, as a result of the conduct alleged in this 

Complaint, pursuant to Section 21(d)(3), (5) and (7) of the Exchange Act [15 U.S.C. §§ 

78u(d)(3), (5) and (7)]; 

III. 

Ordering Leon and Sherr to pay a civil monetary penalty pursuant to Section 20(d) of the 

Securities Act [15 U.S.C. § 77t(d)]; and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 

78u(d)(3)];  

IV. 

Enjoining Leon, for a period of five years, from, directly or indirectly, opening, 

maintaining or trading in any brokerage account(s) in his name, the names of any immediate 

family members, the names of any company over which he has any control or the names of any 

third party individual(s), without providing the relevant broker-dealer(s) a copy of the complaint 

and final judgment entered against him in this action, pursuant to Section 20(b) of the Securities 

Act [15 U.S.C. § 77t(b)] and Sections 21(d)(1) and (5) of the Exchange Act [15 U.S.C. §§ 

78u(d)(1) & (5)]; 

V. 

Enjoining Sherr, for a period of three years, from, directly or indirectly, opening, 

maintaining or trading in any brokerage account(s) in his name, the names of any immediate 

family members, the names of any company over which he has any control or the names of any 

third party individual(s), without providing the relevant broker-dealer(s) a copy of the complaint 

and final judgment entered against him in this action, pursuant to Section 20(b) of the Securities 

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Act [15 U.S.C. § 77t(b)] and Sections 21(d)(1) and (5) of the Exchange Act [15 U.S.C. §§ 

78u(d)(1) & (5)]; and 

VI. 

Granting such other and further relief as the Court may deem just and proper. 

JURY DEMAND 

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff demands that this 

case be tried before a jury. 

Respectfully submitted, 

Date:   September 17, 2024 /s/Judson T. Mihok  
Judson T. Mihok 
Gregory R. Bockin 
Joseph G. Sansone 
Julia C. Green 
Attorneys for Plaintiff: 
SECURITIES AND EXCHANGE COMMISSION 
Philadelphia Regional Office 
1617 JFK Boulevard, Suite 520 
Philadelphia, PA  19103 
215-597-3100 (phone) 
215-597-2740 (fax) 
[email protected] 
 

 

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LOCAL RULE 11.2 CERTIFICATION 

 

Pursuant to Local Rule 11.2, I certify that the matter in controversy alleged against the 

Defendants in the foregoing Complaint is not the subject of any other civil action pending in any 

court, or of any pending arbitration or administrative proceeding. 

 

Date: September 17, 2024    Respectfully submitted, 
 
 
/s/Judson T. Mihok  
Judson T. Mihok 
Gregory R. Bockin 
Joseph G. Sansone 
Julia C. Green 
Attorneys for Plaintiff: 
SECURITIES AND EXCHANGE COMMISSION 
Philadelphia Regional Office 
1617 JFK Boulevard, Suite 520 
Philadelphia, PA  19103 
215-597-3100 (phone) 
215-597-2740 (fax) 
[email protected] 

 

 

 

 

 

    

 

 

 

 

 

 

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Counsel of Record: 
Judson T. Mihok 
Gregory R. Bockin 
Joseph G. Sansone 
Julia C. Green 
SECURITIES AND EXCHANGE COMMISSION 
Philadelphia Regional Office 
1617 JFK Boulevard, Suite 520 
Philadelphia, PA 19103 
Phone: 215-597-65003100 (phone) 
Fax: 215-597-2740 
Email: [email protected] 

 
 
 
 

UNITED STATES DISTRICT COURT  
DISTRICT OF NEW JERSEY 

        
       : 
SECURITIES AND EXCHANGE   : 
COMMISSION,     : 
       : Civil Action No. _________ 
    Plaintiff,  : 
       : DESIGNATION OF AGENT FOR  
   v.    : SERVICE 
       : 
JOEL DAVID CASTRO LEON and    : 
SHMUEL A. SHERR,    : 
       : 
    Defendants.  : 
       : 

 
Pursuant to Local Rule 101.1(f), because the Securities and Exchange Commission (the 

“Commission”) does not have an office in this district, the United States Attorney for the District 

of New Jersey is hereby designated as eligible as an alternative to the Commission to receive 

service of all notices or papers in the captioned action. Therefore, service upon the United States 

or its authorized designee, David Dauenheimer, Deputy Chief, Civil Division, United States 

Attorney’s Office for the District of New Jersey, 970 Broad Street, 7th Floor, Newark, NJ 07102 

shall constitute Service upon the Commission for purposes of this action.                                                               

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 2 

Date:  September 17, 2024 /s/Judson T. Mihok 
Judson T. Mihok 
Gregory R. Bockin 
Joseph G. Sansone 
Julia C. Green 
Attorneys for Plaintiff: 
SECURITIES AND EXCHANGE COMMISSION 
Philadelphia Regional Office 
1617 JFK Boulevard, Suite 520 
Philadelphia, PA  19103 
Phone: 215-597-6500 
Fax: 215-597-2740  
Email: [email protected] 

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JS 44   (Rev. 04/21) CIVIL COVER SHEET
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as 
provided by local rules of court.  This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the 
purpose of initiating the civil docket sheet.    (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)

I. (a) PLAINTIFFS DEFENDANTS

(b) County of Residence of First Listed Plaintiff County of Residence of First Listed Defendant
(EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY)

NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF 
THE TRACT OF LAND INVOLVED.

(c) Attorneys (Firm Name, Address, and Telephone Number) Attorneys (If Known)

II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff 
and One Box for Defendant) (For Diversity Cases Only)

1 U.S. Government 3 Federal Question PTF DEF PTF DEF
Plaintiff (U.S. Government Not a Party) Citizen of This State 1 1 Incorporated or Principal Place 4 4

of Business In This State

2 U.S. Government 4 Diversity Citizen of Another State 2 2 Incorporated and Principal Place 5 5
Defendant (Indicate Citizenship of Parties in Item III) of Business In Another State

Citizen or Subject of a 3 3 Foreign Nation 6 6
Foreign Country

IV. NATURE OF SUIT (Place an “X” in One Box Only) Click here for: Nature of Suit Code Descriptions.
CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES

110 Insurance PERSONAL INJURY PERSONAL INJURY 625 Drug Related Seizure 422 Appeal 28 USC 158 375 False Claims Act
120 Marine 310 Airplane 365 Personal Injury  - of Property 21 USC 881 423 Withdrawal 376 Qui Tam (31 USC 
130 Miller Act 315 Airplane Product Product Liability 690 Other 28 USC 157 3729(a))
140 Negotiable Instrument Liability 367 Health Care/ 400 State Reapportionment
150 Recovery of Overpayment 320 Assault, Libel & Pharmaceutical PROPERTY RIGHTS 410 Antitrust

& Enforcement of Judgment Slander Personal Injury 820 Copyrights 430 Banks and Banking
151 Medicare Act 330 Federal Employers’ Product Liability 830 Patent 450 Commerce
152 Recovery of Defaulted Liability 368 Asbestos Personal 835 Patent - Abbreviated 460 Deportation

Student Loans 340 Marine Injury Product New Drug Application 470 Racketeer Influenced and
(Excludes Veterans) 345 Marine Product Liability 840 Trademark Corrupt Organizations

153 Recovery of Overpayment Liability PERSONAL PROPERTY LABOR 880 Defend Trade Secrets 480 Consumer Credit
of Veteran’s Benefits 350 Motor Vehicle 370 Other Fraud 710 Fair Labor Standards Act of 2016 (15 USC 1681 or 1692)

160 Stockholders’ Suits 355 Motor Vehicle 371 Truth in Lending Act 485 Telephone Consumer
190 Other Contract Product Liability 380 Other Personal 720 Labor/Management SOCIAL SECURITY Protection Act
195 Contract Product Liability 360 Other Personal Property Damage Relations 861 HIA (1395ff) 490 Cable/Sat TV
196 Franchise Injury 385 Property Damage 740 Railway Labor Act 862 Black Lung (923) 850 Securities/Commodities/

362 Personal Injury - Product Liability 751 Family and Medical 863 DIWC/DIWW (405(g)) Exchange
Medical Malpractice Leave Act 864 SSID Title XVI 890 Other Statutory Actions

REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS 790 Other Labor Litigation 865 RSI (405(g)) 891 Agricultural Acts
210 Land Condemnation 440 Other Civil Rights Habeas Corpus: 791 Employee Retirement 893 Environmental Matters
220 Foreclosure 441 Voting 463 Alien Detainee Income Security Act FEDERAL TAX SUITS 895 Freedom of Information
230 Rent Lease & Ejectment 442 Employment 510 Motions to Vacate 870 Taxes (U.S. Plaintiff Act
240 Torts to Land 443 Housing/ Sentence or Defendant) 896 Arbitration
245 Tort Product Liability Accommodations 530 General 871 IRS—Third Party 899 Administrative Procedure
290 All Other Real Property 445 Amer. w/Disabilities - 535 Death Penalty IMMIGRATION Act/Review or Appeal of

Employment Other: 462 Naturalization Application Agency Decision
446 Amer. w/Disabilities - 540 Mandamus & Other 465 Other Immigration 950 Constitutionality of

Other 550 Civil Rights Actions State Statutes
448 Education 555 Prison Condition

560 Civil Detainee -
Conditions of 
Confinement

V. ORIGIN (Place an “X” in One Box Only)
1 Original

Proceeding 
2 Removed from

State Court
3 Remanded from

Appellate Court 
4 Reinstated or

Reopened
5 Transferred from

Another District
(specify)

6 Multidistrict
Litigation - 
Transfer

8  Multidistrict
Litigation -
Direct File

VI. CAUSE OF ACTION Brief description of cause:

VII. REQUESTED IN
COMPLAINT:

CHECK IF THIS IS A CLASS ACTION
UNDER RULE 23, F.R.Cv.P. 

DEMAND $ CHECK YES only if demanded in complaint:
JURY DEMAND: Yes No

VIII. RELATED CASE(S)
IF ANY (See instructions):

JUDGE DOCKET NUMBER

DATE SIGNATURE OF ATTORNEY OF RECORD

FOR OFFICE USE ONLY

RECEIPT # AMOUNT APPLYING IFP JUDGE MAG. JUDGE

26 USC 7609

INTELLECTUAL

X

X

X

X

s/Judson T. Mihok9/17/2024

Joel David  Castro Leon and Shmuel A. Sherr

Steven Y. Yurowitz
YurowitzLaw PLLC
950 Third Avenue, 31st. Floor, New York, NY 10022

Judson T. Mihok
U.S. Securities and Exchange Commission
1617 JFK Boulevard, Suite 520, Philadelphia, PA 19103 (215)597-6500

Securities Fraud

Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):
15 U.S.C. §§ 77q(a)(1) and (3); 15 U.S.C. § 78j(b), and 17 C.F.R. §§ 240.10b-5(a), (c); 15 U.S.C. § 78i(a)(2)

U.S. Securities and Exchange Commission

Case 2:24-cv-09214     Document 1-1     Filed 09/17/24     Page 1 of 1 PageID: 19