Guy Gentile is a registered principal with a checkered past, who went rogue. The SEC is accusing him of evading US regulations on stock trading. Again.
A principal going rogue
These elements were collected from various sources and organized chronologically:
- Guy Gentile has been a registered broker from 1999 to 2012. He is named as one of the direct officers of the third one, Protrade Securities, during 2010-2011. He became Series 24 (principal) in 2000 and a Series 4 (option principal) in 2002.
- In 2008, Gentile incorporated Swiss America Securities in the Bahamas. Gentile marketed this company as SureTrader, notably through a dedicated website www.suretrader.com.
- In 2011, to avoid new day-trading margin regulations, Gentile registered SureTrader with the Securities Commission of he Bahamas (SCB) as a broker-dealer, but not in the united States. The firm charges $4.95 per trade, which are 99% US equities.
- In 2012, Gentile is arrested at the airport. He had got involved in advertising two penny stocks in 2008, which turned out to be pump and dump schemes. He consents to help the SEC, not only in these case, but also other similar cases.
- In early 2012, his Bahamian company has only 100 customers, and Gentile begins soliciting US customers. That year, SureTrader reported 100,000 equity transaction daily. The firm is ranked among Barron’s top online brokers.
- Guy Gentile argued that he actually was an informant for the SEC between 2012 and 2015 on other manipulation scheme. For his help, he negotiated a dismissal of his NJ case, a move which he said enraged the SEC and started a never-ending regulatory scrutiny. There is a long story on this here and an even longer one here.
- In 2016, Gentile is indicted by the state of NJ on the charges of penny stock manipulations, but the case was eventually dismissed due to statutes of limitation in 2017. The SEC also filed against him in 2016, but the charges were dismissed on the same statue of limitations. He felt betrayed. Gentile actually filed against NJ for abuse of investigatory process, a case which was dismissed and re-dismissed on appeal.
- In 2016 and 2017 (if not before), Gentile sent US customers thousands of emails advertising “top stocks” and trade timing, while redirecting traders to his website for execution. He offered free trial periods, and trading tip videos. He advertised through US affiliates, www.Warriortrading.com, www.DayTradingRadio.com and five other similar companies, where US customers were targeted and were routinely on-boarded.
- SureTrader is renamed MintBroker International in 2017.
- That same year, Guy Gentile’s Russian-born model girlfriend is miffed that he would not finance her marketing business. So she dumped his Mercedes in the pool of his Bahamas residence. (That story is not in the SEC’s claim, for some reason)
- After relocating to Puerto Rico in 2017, Mr. Gentile tried to organize Mint Bank there, but the attempt was dismissed by the OCIF (Office of the Commissioner of Financial Institutions of Puerto Rico) because of his lack of ‘commercial integrity’. The final order notably argued that he was under regulatory investigations, and that he forgot to mention the SEC’s stock manipulation action against him. Best of all, he had stated in a Bloomberg interview that “he was going rogue”, and that he wanted a “F— You DOJ” license plate for his new car.
- In 2018, MintBroker International settles with the SCB for violations of the Bahamian securities law and pays $120,000.
- In 2019, the SCB suspends SureTrader‘s BD registration for 5 days, notably for failing to disclose a UK and Canadian subsidiaries.
- In 2019, SureTrader changed its clearer to F1Trade, a CFD broker in Bahamas also managed by Gentile and SureTrader’s CFO.
- In 2020, the SCB filed a winding up order for SureTrader to the Bahamas supreme court. This liquidation process is on-going.
- That year, a three-judge panel confirmed that the SEC was within its right to investigate Guy Gentile.
- In 2021, SureTrader’s business changed again, and is now offering its proprietary trading platform to US day-traders, without any registration whatsoever with the SEC.
- on March 19th, 2021 (3 days before the last SEC lawsuit), Gentile disclosed that he may have found a settlement with the OCIF.
- Guy Gentile is currently managing a “hot stock alert” news platform (www.guygentile.com), as well as “the #1 live trading chat room in the world” (www.daytraderpro.com), actually representing himself as “the SEC’s most loved rogue trader”
The least you can say is that there is a lot of information out there, but there is probably more hidden from public view.
A few modest comments
- There are FINRA regulations about “pattern day trading” (buying or selling on margin intra-day). They notably require that the customer deposits a minimum of $25,000 on the account at all time, and the trader cannot exceed the ‘day-trading power’ associated with that amount. Gentile’s trading platform never required such deposit or limitations.
- Having customers sign documents that they were not solicited doesn’t remove the fact that they were solicited. A pop-up on a website to attest that customers are not US customers isn’t exactly appropriate either, especially if US customers can keep on opening an account.
- When 50% (actually up to 80%) of your 40,000 customers are US, it’s hard to argue that you didn’t know they were.
- It’s hard to argue for a principal that you don’t know basic US regulations or any of the facts above.
Selling market access to US individuals from the Bahamas and without registration and to flout margin rules, may not be the smartest thing to do for a principal. But going rogue and advertise it, is really not the smartest thing to do. Any authority with a bit of good sense needs to address extreme situations. The SEC may not have all the resource it would like, but you really don’t want to be the nail it tries to hammer to make an example.
The case has been filed in the Southern District of Florida on 3/22/21.
- Wikipedia, unsure date and information source: Guy Gentile
- Securities Lawyer 101, date unsure: FBI Informant Guy Gentile Pushes Back Guy Gentile Pushes Back
- Bloomberg, Mach 2017: ‘Bro, I’m Going Rogue’: The Wall Street Informant Who Double-Crossed the FBI
- NY post, October 2017: Hotshot banker says jilted lover drove his Benz into pool.
- NY Post, July 2018: Hotshot banker denied business license over ‘F–k you DOJ’ joke: suit
- NY Post, August 2019: Investor who was once FBI informant files $25M defamation lawsuit against rival
- Westlaw News, September 2020: Securities regulator can’t be sued over investigation – 3rd Circuit
- SEC’s release, Nov 2020: Guy Gentile
- Courthouse news service, Nov 2020: SEC Investigation Into Ex-Informant Challenged in 11th Circuit
- FINRA Broker check: GUY GENTILE
- SEC’s latest claim, March 2021: https://www.sec.gov/litigation/complaints/2021/comp25058.pdf