Articles Tagged with options trading

Stoltmann Law Offices, P.C. is a Chicago-based securities and investment fraud law firm that offers representation to victims on a contingency fee basis, nationwide. We are investigating claims for investor/victims of Ron Harrison’s alleged options trading scheme. On September 30, 2021, the SEC filed a civil complaint against Ron Harrison and his company Global Trading Institute, LLC seeking an injunction and to have a restraining order put in place to freeze his assets.  The SEC complaint alleges that Harrison ran a substantial options trading scheme where he charged clients a percentage of alleged gains in their brokerage accounts on a monthly basis. The problem is, as alleged by the SEC, there were no gains, only losses. According to the complaint, Harrison traded directly through access to his clients’ brokerage accounts.  Twenty-two investor victims suffered losses of over $2 million.  The SEC alleges that Harrison received at least $900,000 in ill-gotten fees from the scheme, a lot of which was transferred to his Russian fitness instructor girlfriend.

Harrison was not licensed to provide investment advice or trade securities with any regulator or state. In fact, he was barred from the securities industry way back in 1992 for misappropriating funds and excessively trading customer accounts. This trading scam dates back to 2016 and continued on well into 2021.  Records reviewed by Stoltmann Law Offices reveals that Harrison’s clients used TD Ameritrade as their broker/dealer. Part of Harrison’s scheme was to have investors provide him with their credentials to log into their brokerage accounts and trade options pursuant to his alleged strategy.  The options trading Harrison engaged in was highly speculative and aggressive, including writing naked put options and using hefty amounts of margin.  Because of the activity Harrison engaged in, and because of the highly regulated market options trading takes place in, TD Ameritrade could be liable to Harrison’s victims for aiding and abetting his scheme.

In order to trade options in any brokerage account, the brokerage firm must perform a high level and detailed know your customer analysis. To qualify for the level of margin Harrison used, referred to as portfolio margin, the account owner in many cases has to take a test to even qualify for that level of margin clearance.  Furthermore, technical metrics and electronic log-ins and tracing would have revealed that Harrison was logging into multiple client accounts from the same device and IP address. Since he was unlicensed, he could not do this and TD Ameritrade’s compliance system should have caught on to what he was doing, but failed to do so.  FINRA Rules, Anti-Money Laundering, and Bank Secrecy Act regulations mandate that TD Ameritrade have adequate compliance systems to detect and deter violations of this sort.

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