sec-litreleases litigation_release 65 KB 3,132 chars

SEC v. David A. Zwick; Todd J. Cohen; and Terrence J. O'Donnell, No. LR-18096, Southern District of New York — Press Release

raw: David A. Zwick, Todd J. Cohen, and Terrence J. O'Donnell

David A. Zwick, Todd J. Cohen, and Terrence J. O'Donnell, No. LR-18096 (S.D.N.Y.)

Caption: SEC v. David A. Zwick, et al.

summary

The SEC charged former Suncoast Capital Group principals David A. Zwick and Todd J. Cohen and trader Terrence J. O'Donnell with securities fraud for orchestrating a kickback scheme with New York Life trader Anthony Shen, who directed $1.5M in off-market trades to Suncoast in exchange for $57,200 in cash and gifts, enabling Suncoast to profit over $1.5M while the defendants concealed the scheme by disguising payments as gambling losses.

paragraph

The SEC charged David A. Zwick, Todd J. Cohen, and Terrence J. O'Donnell with securities fraud for their roles in a kickback scheme involving New York Life Insurance Company trader Anthony Dong-Yin Shen. Over 15 months in 1998–1999, Shen directed approximately $1.5 million in securities trades to Suncoast at artificially favorable, off-market prices, receiving at least $50,800 in cash and $6,400 in non-cash gifts in return, while Suncoast realized over $1.5 million in gross profits. The defendants are accused of violating Section 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, with the SEC seeking permanent injunctions, disgorgement plus prejudgment interest, and civil penalties.

narrative

The SEC filed a civil enforcement action against David A. Zwick, Todd J. Cohen, and Terrence J. O'Donnell, former principals and trader at Suncoast Capital Group, for their participation in a fraudulent kickback scheme with Anthony Dong-Yin Shen, a trader at New York Life Insurance Company. Between 1998 and 1999, Shen directed approximately 40 trades totaling $1.5 million in securities to Suncoast at off-market prices that were detrimental to New York Life, in exchange for at least $50,800 in cash and $6,400 in gifts. Zwick, as compliance officer, approved and encouraged the kickbacks, including disguising them as payments on losing bets; Cohen, as trading desk supervisor, actively promoted the scheme; and O'Donnell executed most of the fraudulent trades while helping conceal them. All three defendants knowingly or recklessly approved the manipulated trade prices and assisted in hiding the scheme from New York Life. Suncoast generated over $1.5 million in gross profits from these illicit transactions. The SEC alleges violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, seeking permanent injunctions, disgorgement with prejudgment interest, and civil penalties. The investigation was conducted with assistance from the U.S. Attorney’s Office for the Southern District of New York and the U.S. Postal Inspection Service.

Enriched metadata

Scheme: broker-dealer-fraud (90%)
Court: Southern District of New York
Entity: David A. Zwick

Classified broker-dealer-fraud(confidence 90%). EDGAR detection: forms Form D· recall 29% / precision 9%. detection rule →

Extracted insights

Dollar amounts 3

$1.50M $1,500,000 $1M–$10M
$51K $50,800 $10K–$100K
$6K $6,400 <$10K

Entities 6

scheme_term breckenridge in concealing the kickback scheme from new york life
scheme_term breckenridge to give gifts and cash kickbacks to shen
scheme_term breckenridge to pay cash kickbacks to shen disguised as payments on losing bets
person civil enforcement action
agency Securities and Exchange Commission
person Todd J. Cohen

Triples 17

Securities and Exchange Commission Filed Civil Enforcement Action
Securities and Exchange Commission Charged David A. Zwick, Todd J. Cohen, and Terrence J. O'Donnell
Securities and Exchange Commission Alleges Suncoast received order flow and trades at favorable prices from Anthony Dong-Yin Shen in exchange for cash kickbacks and gifts
Securities and Exchange Commission Alleges Shen directed approximately forty trades totaling millions of dollars of securities to Suncoast at prices that were off-market or more favorable to Suncoast and detrimental to New York Life than were otherwise available in the market
Securities and Exchange Commission Alleges Shen was paid at least $50,800 in cash, and at least $6,400 in non-cash gifts
Securities and Exchange Commission Alleges Suncoast realized gross profits in excess of $1,500,000 from the trades
David A. Zwick Procured, Approved, and/or Encouraged Breckenridge to give gifts and cash kickbacks to Shen
David A. Zwick Knowingly or Recklessly Approved Fraudulent Prices on Suncoast Trades with New York Life
Todd J. Cohen Encouraged Breckenridge to pay cash kickbacks to Shen disguised as payments on losing bets
Todd J. Cohen Knowingly or Recklessly Approved Fraudulent Prices on Suncoast Trades with New York Life
Terrence J. O'Donnell Encouraged Breckenridge to pay cash kickbacks to Shen disguised as payments on losing bets
Terrence J. O'Donnell Knowingly or Recklessly Executed Most of the fraudulently priced New York Life trades
Zwick, Cohen, and O'Donnell Actively Assisted Breckenridge in concealing the kickback scheme from New York Life
Securities and Exchange Commission Charges Defendants each violated Section 17(a) of the Securities Act of 1933
Securities and Exchange Commission Charges Each violated and aided and abetted violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder
Securities and Exchange Commission Seeks Permanent Injunctions, Disgorgement plus Prejudgment Interest, and Civil Penalties against all three Defendants
Securities and Exchange Commission Acknowledges Assistance provided by the United States Attorney's Office for the Southern District of New York and the United States Postal Inspection Service in the investigation of this matter

View original SEC litigation releasesec.gov

Extracted body text (3,132c)

Securities and Exchange Commission v. David A. Zwick, Todd J. Cohen, and Terrence J. O'Donnell, 03 Civ. 2742 (JGK) (S.D.N.Y.) SEC CHARGES FORMER SUNCOAST PRINCIPALS AND TRADER WITH SECURITIES FRAUD FOR PARTICIPATION IN KICKBACK SCHEME David A. Zwick, Todd J. Cohen, and Terrence J. O'Donnell Charged The Securities and Exchange Commission today filed a civil enforcement action charging David A. Zwick and Todd J. Cohen, two former principals of Suncoast Capital Group, Ltd., and Terrence J. O'Donnell, a former Suncoast trader, with participation in a fraudulent kickback scheme. Suncoast was a registered broker-dealer based in Fort Lauderdale, Florida. The Commission alleges that Suncoast, through Deborah J. Breckenridge, a former Suncoast salesperson, received order flow and trades at favorable prices from Anthony Dong-Yin Shen, an employee of New York Life Insurance Company, Inc., in exchange for cash kickbacks and gifts. Shen was responsible for trading in New York Life's proprietary accounts. The Commission's Complaint alleges that over a fifteen-month period in 1998 and 1999, Shen directed approximately forty trades totaling millions of dollars of securities to Suncoast at prices that were "off-market" or more favorable to Suncoast and detrimental to New York Life than were otherwise available in the market. In exchange for the trades, Shen was paid at least $50,800 in cash, and at least $6,400 in non-cash gifts. Suncoast realized gross profits in excess of $1,500,000 from the trades. The Complaint further alleges that: Former Suncoast principal and compliance officer David A. Zwick procured, approved, and / or encouraged Breckenridge to give gifts and cash kickbacks to Shen - including kickbacks disguised as payments on losing bets -- and knowingly or recklessly approved fraudulent prices on Suncoast trades with New York Life. Former Suncoast principal and trading desk supervisor Todd J. Cohen encouraged Breckenridge to pay cash kickbacks to Shen disguised as payments on losing bets, and knowingly or recklessly approved fraudulent prices on Suncoast trades with New York Life. Former Suncoast trader Terrence J. O'Donnell encouraged Breckenridge to pay cash kickbacks to Shen disguised as payments on losing bets, and knowingly or recklessly executed most of the fraudulently priced New York Life trades. Zwick, Cohen, and O'Donnell each actively assisted Breckenridge in concealing the kickback scheme from New York Life. The Commission charges that the Defendants each violated Section 17(a) of the Securities Act of 1933; and that each violated and aided and abetted violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder -- antifraud provisions of the federal securities laws. The Commission seeks permanent injunctions, disgorgement plus prejudgment interest, and civil penalties against all three Defendants. The Commission acknowledges the assistance provided by the United States Attorney's Office for the Southern District of New York and the United States Postal Inspection Service in the investigation of this matter. SEC Complaint in this matter

OCR text (3,132c · plain-text · 99% conf)