Cedarhurst resident and accountant Shaun Greenwald admitted to being guilty of a stock market manipulation scheme in United States District Court in New Jersey on Feb. 20. On his LinkedIn account, Greenwald is listed as president Cedarhurst-based SGS Advisors.
According to the U.S. Attorney’s Office, Greenwald, 40, working in tandem with Joseph Taub, 38, of Clifton New Jersey, netted millions in illegal profits between 2014-16. Greenwald was charged with one count of securities fraud conspiracy and one count of tax fraud conspiracy by U.S. District Judge John Michael Vazquez
Greenwald and Taub, along with others, planned to change security prices of various public companies by secretly controlling dozens of brokerage accounts. They used their own names, the names of their families and company names for the accounts.
Some accounts were also under the name of individuals not involved in the scandal. The accounts were funded by Taub, a Greenwald client, and the account holders were in charge of concealing the plan to the law enforcement. All of this is based on filed court documents and statements made in court.
First, security shares were purchased by a “winner account” and then the “loser account” would place smaller orders to add pressure to the stock price. When the security’s price increased, Greenwald sold the shares. He involved Taub by opening up accounts in his own name and having Taub fund them. He gave Taub the information to access his accounts to make trades. They split the profits.
Greenwald calculated all the taxes he received from the trades. The taxes were paid lower than Taub’s rates, giving the account holders only a fraction of the profit they were supposed to receive. Taub did not declare any of this income on his tax returns, although he did declare the taxes on his portion of the profits.
Each count of fraud Greenwald pleaded guilty to is punishable by up to five years in prison and a $250,000 fine. His sentencing hearing is scheduled for June 5. Taub was charged by complaint and is considered innocent until proven guilty.
The Federal Bureau of Investigation, the Internal Revenue Service, the U.S. Attorney’s Office in New Jersey and the New York Regional Office of the Securities Exchange Commission were involved in the investigation.