SEC v. Suyun Gu; and Yong Lee, No. LR-26355, District of New Jersey (July 21, 2025) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26355 / July 21, 2025 Securities and Exchange Commission v. Suyun Gu, et al., No. 1:21-cv-17578 (D.N.J. filed Sept. 27, 2021) SEC Obtains Final Judgment Ordering Over $1.3 Million in Monetary Relief Against Individual In Wash Trading Scheme Involving Liquidity Rebates On July 9, 2025, the U.S. District Court for the District of New Jersey entered a final judgment against Suyun Gu, who was previously charged with engaging in a fraudulent trading scheme to collect liquidity rebates from security exchanges through wash trading of thinly-traded put options in early 2021. According to the SEC’s complaint, filed on September 27, 2021, and amended on December 19, 2022, Gu and his co-defendant, Yong Lee, used broker-dealer accounts that paid liquidity rebates to place options orders on one side of the market, and then used other broker-dealer accounts that did not charge fees for taking liquidity for subsequent orders on the other side of the market for the same options, resulting in hundreds of thousands of dollars in illegal profits. The Court entered a consent judgment against Lee on all claims on September 29, 2021. On September 6, 2024, the Court granted the SEC’s motion for summary judgment on all of its claims against Gu. The Court found that Gu executed more than 11,000 wash trades between accounts he controlled, involving approximately three million options contracts, in violation of Sections 9(a)(1) and 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), Rule 10b-5 thereunder, and Sections 17(a)(1) and (2) of the Securities Act of 1933 (“Securities Act”). The Court also found that Gu (1) went to great lengths to conceal his trading scheme and to deceive other market participants including by using a series of virtual private servers to mask his internet protocol address and hide the fact that he was trading in others’ accounts; (2) added false information to the trading account profiles of friends and family whose accounts he traded in; (3) made false and misleading statements to brokerage firms when they asked questions about his trading; and (4) willfully ignored red flags about the propriety of his conduct by continuing his scheme at other brokerage firms after his trading accounts were suspended, after his co-defendant Lee stopped trading, and even after Lee sent him an article defining wash trading. On July 9, 2025, the Court entered a final judgment permanently enjoining Gu from violating Exchange Act Sections 9(a)(1) and 10(b), and Rule 10b-5 thereunder, and Securities Act Section 17(a). The Court also ordered Gu to pay $621,703 in disgorgement of ill-gotten gains plus $134,663 in prejudgment interest thereon, and a civil penalty of $621,703. The Commission’s litigation was led by John Bowers, Edward Reilly, and Andrew McFall, with supervision by James Connor. The SEC’s investigation was conducted by Mr. McFall, with the assistance of Matthew Koop and Mandy Sturmfelz, of the Market Abuse Unit, and Maxwell Clarke, of the SEC's Division of Economic and Risk Analysis, and supervised by Paul Kim and Joseph Sansone.

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26355 / July 21, 2025 Securities and Exchange Commission v. Suyun Gu, et al., No. 1:21-cv-17578 (D.N.J. filed Sept. 27, 2021) SEC Obtains Final Judgment Ordering Over $1.3 Million in Monetary Relief Against Individual In Wash Trading Scheme Involving Liquidity Rebates On July 9, 2025, the U.S. District Court for the District of New Jersey entered a final judgment against Suyun Gu, who was previously charged with engaging in a fraudulent trading scheme to collect liquidity rebates from security exchanges through wash trading of thinly-traded put options in early 2021. According to the SEC’s complaint, filed on September 27, 2021, and amended on December 19, 2022, Gu and his co-defendant, Yong Lee, used broker-dealer accounts that paid liquidity rebates to place options orders on one side of the market, and then used other broker-dealer accounts that did not charge fees for taking liquidity for subsequent orders on the other side of the market for the same options, resulting in hundreds of thousands of dollars in illegal profits. The Court entered a consent judgment against Lee on all claims on September 29, 2021. On September 6, 2024, the Court granted the SEC’s motion for summary judgment on all of its claims against Gu. The Court found that Gu executed more than 11,000 wash trades between accounts he controlled, involving approximately three million options contracts, in violation of Sections 9(a)(1) and 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), Rule 10b-5 thereunder, and Sections 17(a)(1) and (2) of the Securities Act of 1933 (“Securities Act”). The Court also found that Gu (1) went to great lengths to conceal his trading scheme and to deceive other market participants including by using a series of virtual private servers to mask his internet protocol address and hide the fact that he was trading in others’ accounts; (2) added false information to the trading account profiles of friends and family whose accounts he traded in; (3) made false and misleading statements to brokerage firms when they asked questions about his trading; and (4) willfully ignored red flags about the propriety of his conduct by continuing his scheme at other brokerage firms after his trading accounts were suspended, after his co-defendant Lee stopped trading, and even after Lee sent him an article defining wash trading. On July 9, 2025, the Court entered a final judgment permanently enjoining Gu from violating Exchange Act Sections 9(a)(1) and 10(b), and Rule 10b-5 thereunder, and Securities Act Section 17(a). The Court also ordered Gu to pay $621,703 in disgorgement of ill-gotten gains plus $134,663 in prejudgment interest thereon, and a civil penalty of $621,703. The Commission’s litigation was led by John Bowers, Edward Reilly, and Andrew McFall, with supervision by James Connor. The SEC’s investigation was conducted by Mr. McFall, with the assistance of Matthew Koop and Mandy Sturmfelz, of the Market Abuse Unit, and Maxwell Clarke, of the SEC's Division of Economic and Risk Analysis, and supervised by Paul Kim and Joseph Sansone.