week 4 discusion thread 3

Running head: STOCK OPTIONS 1

STOCK OPTIONS 2

In the SEC's website, click on the news digest and locate an interesting piece of news. Describe it for the class

The SEC News Digest gives daily information on Commission actions, including, rule filings, enforcement proceedings, policy statements, and Commission meetings. On my research, the news I found interesting is based on an investor, Niket Shah (“Newsroom,” 2017).

On March 23, 2018, the exchange commission and securities announced charges and a preliminary injunction and asset freeze against Niket Shah and the Sparking Trading firm due to misconduct in the business. Based on the news, Niket Shah, a Jersey resident who stole about $250,000 in a Ponzi scheme in which his friends and coworkers invested. The SEC acted swift to investigate the whole process and charged Niket Shah.

Shah used Spark Trading Group, LLC to defraud investors into contributing hundreds of thousands of dollars to in funding shah in marketing. Shah convinced the investor's investments for the funds by lying about his success as a trader, Spark Trading's returns, and how he intended to use investors' money, including altering financial statements to make the funds seems profitable. However, the investors lost all the money they had invested and reported the shah to the relevant authority for proceeding in finding the justices.

For example, one of the investors said that Mr. Shah promised he would pay him monthly returns and guaranteed against losses. However, Shah misused investor money for his benefit and suffered substantial losses on the amounts invested. When investors sought their money back, he lied and said the money had been frozen by government agencies, including the Commission. He used his friend’s financial statements who works in the hospital when convincing and deceiving other people.  The court had issued on March 12, 2018, temporal asset freeze against Shah and Spark Trading, and ordered them to provide an accounting of all money received from investors to facilitates further investigation.

References

Hebert, L. E., Weuve, J., Scherr, P. A., & Evans, D. A. (2013). Alzheimer disease in the United States (2010–2050) estimated using the 2010 census. Neurology, 80(19), 1778-1783.

Newsroom. (2017, February 05). Retrieved March 25, 2018, from https://www.sec.gov/page/news

Reppenhagen, D. A. (2010). Contagion of accounting methods: Evidence from stock option expensing. Review of accounting studies, 15(3), 629-657.