SEC v. Anand Sekaran and Wasson Capital Advisors, Ltd., Case No. 12-cv-8199 JMP (S.D. N.Y.).  On November 9, 2012, the SEC announced charges against Anand Sekaran and his firm Wasson Capital Advisors.  The SEC alleges that Wasson’s strategy was to create income by selling out-of -the-money exchange-traded options that were near expiration.  As the strategy became unprofitable, Sekaran and Wasson started losing money and tried to hide the losses by providing clients with fake account statements.  The SEC also alleges that they misappropriated client funds.

Sekaran and Wasson have agreed to settle with the SEC as well as a parallel criminal action.  In settling with the SEC, Sekaran and Wasson consented to a final judgment imposing permanent injunctions from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.  Sekaran separately consented to an SEC order barring him from the securities industry, including the investment advisory business, and penny stock industry.  Sekaran is required to pay $2.3 million to satisfy restitution and forfeiture orders in the criminal matter.