This Week In Securities Litigation (Week of August 4, 2025)
Last week the Commission filed one new enforcement action. The agency also resolved two other cases and initiated a subpoena enforcement action based on a pending investigation.
Be careful, be safe.
SEC Enforcement – Filed and Settled Actions
Statistics: Last week the Commission filed 1 new civil enforcement action and continued to settle others.
Offering fraud: Defendant Josh Rocha, a citizen of Cabo Verde residing in Brockton, Massachusetts, is alleged to have convinced at least 13 investors over a two-year period beginning in September 2020, to entrust him with $1 million with no more than a continuing series of false statements that were apparently never examined by potential investors. The story began with a claim that Defendant was an investment adviser who would take investor cash and create profits; not just routine profits, however, but 12% per month profits. The investors apparently accepted the claim and trusted the so-called adviser based on his representation that he had been successful in the past despite a failure of Defendant to present facts regarding his past to verify the claim. Indeed, once the investor cash was transferred to Defendant there was no evidence demonstrating that it left Defendant’s account until the end of this matter. To the contrary, not only did the investor cash stay in Defendant’s account, the few trades made resulted in losses – there were no successful trades. Apparently, the investors never checked or demanded proof of Defendants claims. The complaint alleges violations of Securities Act Section 17(a), Exchange Act Section 10(b) and Rule 10b-5 and Advisers Act Sections 206(1) and 206(2). Defendant settled the action, consenting to the entry of permanent injunctions based on the Sections cited. He also consented to the entry of an order which permanently precludes him from buying or selling securities except for his own account. See Lit. Rel. No. 26365 (July 30, 2025).
Insider trading: SEC v. Gupta, Civil Action No. 1:24-cv-12316 (D. Mass.) is an action which names as defendant Dishant Gupta, a New Jersey resident then employed by Epizyme, Inc. Through the course of his employment, Defendant Gupta learned that his employer – Ipsen Biopharmaceuticals, Inc. – was interested in a business transaction. Specifically, he learned that the firm was interested in acquiring either Epizyme or its premier drug months before the transaction was publicly announced. Following the deal announcement on September 24, 2024, he sold his shares at a profit of about $260,000. After being charged by the Commission with insider trading he resolved the matter, consenting to the entry of a permanent injunction which included an officer director bar. The order was entered by the court. Subsequently, the court entered an order regarding monetary relief. In an order dated July 29, 2025, the court directed Mr. Gupta to pay disgorgement in the amount of $260,078 and prejudgment interest in the amount of $36,801. Those amounts were off-set by the orders entered in the parallel criminal action in which Mr. Gupta pleaded guilty and was sentenced to serve two months in prison. U.S. v. Gupta, 24-cr-10279 (D. Mass.). See Lit. Rel. No. 26364 (July 30, 2025).
Breach of duty: SEC v. Craffy, Civil Action No. 3:23-cv-03639 (D.N.J.). This action centers on an offering fraud scam and the misuse of account assets of military Gold Star families. On September 4, 2024, the Commission obtained a final judgment against Caz L. Craffy, an individual who was charged with defrauding Gold Star families. Defendant in this action had been permitted to provide general financial and education work to service members’ gold star families through his job as a U.S. Army financial counselor. Working in that position Defendant Craftay, between 2018 and 2022, directed grieving family members to transfer their benefits to him. At the time Mr. Craffy was working full time for private brokerage firms. Once the assets were transferred Defendant Craffy used them to engage in unauthorized and excessive trading. Mr. Craffy ran up losses of about $1.79 million. The improper trading also resulted in fees totaling about $1.64 million, most of which were paid to Defendant Craffy. The Commission’s complaint alleged violations of Securities Act Section 17(a) and Exchange Act Sections 10(b) and Rules 10b-5 and 151-1(a)(1). In the parallel criminal case, Mr. Craffy was sentenced to serve 151 months in prison followed by 3 years of supervised release. He was also ordered in that case to pay about $1,482,741 and $4,085,988, respectively, in forfeiture and restitution. U.S. v. Craffy, No. 23-541 (D.N.J.). In view of the amounts ordered in the criminal case, the Commission advised the court it did not intend to seek further financial penalties. See Lit. Rel. No. 26363 (July 29, 2025).
Subpoena enforcement action: SEC v. Rabindranauth Persuad, Civil Action No. 1:25-mc-00312 (S.D.N.Y. Filed July 24, 2025) is an action which names as defendant the registered agent of Brooklyn-based RRTP Consulting Services, LLC, for failing to produce documents for which the Commission issued a subpoena. Those include Brooklyn-based RRTP Consulting Services, LLC, an agent of Defendant. The Commission issued a subpoena for documents dated October 2, 2024, and for testimony on May 14, 2025, for all individuals and entities Persuad provided services to and documents concerning the nature of any services Persuad provided. No documents or testimony have been provided. This filing is in connection with a fact-finding investigation. See Lit. Rel. No. 26362 (July 29, 2025).
Other Regulatory Actions (Articles/papers cited available on website listed)
BaFin
Article: An article published by the regulator, and written by Dr. Sibel Kocatepe of BaFin IT Supervision, discusses the impact of concentrations that become a risk for regulators and the markets, dated August 1, 2025. It is titled: Supervisory Focus: When Concentrations become a risk.
ESMA
Newsletter: The European Securities and Markets regulator published the latest edition of its new letter on July 7, 2025.
Hong Kong
Remarks: The regulator published a new speech by Kelvin Wong titled “Opening Remarks at Chinese Asset Management Association of Hong Kong’s Annual Meeting, dated July 30, 2025.
Singapore
Report: The Monetary Authority of Singapore published a paper reporting on consumer price developments in June 2025, dated July 23, 2025.