SEC Assets Freeze, Fraud Charges for UCB Financial, Director
A Miami Investment Advisor used a form of securities fraud to funnel $ 4.6 million into accounts in his parents’ name while sticking other clients with more than $ 5.5 million in losses, a Securities and Exchange Commission complaint unsealed Thursday alleged.
The SEC also announced an asset freeze against Brickell companies UCB Financial Advisers and UCB Financial Services Limited and UCB Group executive director Ramiro Sugranes. No criminal charges have been filed in Miami Federal Court by the Department of Justice.
“I have no comment on anything,” Sugranes said when reached by phone Thursday afternoon.
When the Miami Herald called the UCB companies’ phone number, the number was disconnected.
“We claim that Sugranes used UCB’s investment firms to funnel millions of dollars to two clients, while offloading over $ 5 million in day one losses onto their other clients,” Joseph said. G. Sansone, Head of the Market Abuse Unit of the SEC Enforcement Division.
The two clients, as named in the complaint, are Ramiro Sugranes Hernandez and Thelma Lanzas De Sugranes – who, according to the complaint, are the parents of Ramiro Sugranes. The complaint indicates that the two names appear on the two “preferred” accounts.
In addition, the complaint raises Sugranes’ story of questionable account practices involving relatives. He resigned from a brokerage job in 2004, according to the complaint, “after failing to follow company procedures for documenting certain transactions in one of his relative’s accounts.”
One year later, UCB’s financial advisers registered with the state of Florida with Sugranes was President and CEO.
Negotiate titles to give the best to parents, to others the rest?
About 100 clients in several states and different countries have given UCB companies the right to transact for them. But, from September 2015, according to the complaint, the two accounts held by Sugranes’ parents received preferential treatment to the detriment of other customers through “picking”.
“[Sugranes] implements the selection system by first using a mid-price trading account used by UCB Entities to purchase stocks and options on behalf of numerous client accounts, ”the complaint states. “Sugranes then allocates these transactions to specific accounts, usually later that same day.
“If the value of the position increases during that day, the position is usually closed, thus locking in the profit of the same day, and the opening and closing trades and the corresponding profits are allocated to one of the preferred accounts. “said the complaint. keep on going. “If the value of trades decreases during that day, the position (which is worth less at the time of grant than it was at the time of purchase and, therefore, has a loss on the first day) is generally attributed to [the account(s) of] one or more other clients of UCB Entities.
“Conversely, the complaint alleges that if the price of the securities fell during the trading day, the defendants generally allocated unprofitable trades to other accounts receivable. “
The complaint uses examples of this fact with stocks and options, on individual days and over several years. It indicates that of 496 Google stock option trades between September 2, 2015 and March 26, 2021, 290 went to the two preferred accounts and made $ 648,000 on the first day of trading. The other 206, who lost $ 767,000, went to non-privileged accounts.
Between stocks and options, the complaint calculates that preferred accounts racked up $ 4,629,814 in gains on day one while non-preferred accounts suffered $ 5,575,130 in losses.
“The odds that chance could explain this difference in day one profit and loss between preferred and non-preferred accounts are less than one in a billion,” the complaint states.
And, according to the complaint, at least $ 2.24 million of those profits were taken from preferred accounts.