Sham B-D targeted Hispanics, SEC says

The SEC has charged a man for running a fraudulent unregistered day-trading firm and violating federal securities laws. The complaint, filed in United States District Court for the Southern District of Florida yesterday, accused Ricardo H. Goldman of defrauding more than 110 day traders between May 2004 and February 2006. He also allegedly violated securities registration provisions by, among other things, acting as an unregistered broker-dealer. The Securities and Exchange Commission is now seeking a permanent injunction, disgorgement plus interest and a financial penalty. Mr. Goldman, the sole managing member of Miami-based E Trade Fund LLC — which is not affiliated with E*Trade Financial Corp. of New York — targeted Hispanic investors through Spanish-language papers in the Miami area and on the Internet. According to the complaint, he used some of the $2.15 million originally invested by participants to cover trading subaccount shortfalls. In a two-year period, Mr. Goldman’s day trader victims lost about $1 million. He also allegedly siphoned commission rebates into his own bank account and lied to investors about the protections on their investments, telling them each of their accounts was backed by the Washington-based Securities Investor Protection Corp. for $500,000, when they in fact weren’t. This isn’t the first time he has been in trouble: In 1994, he was criminally convicted for grand theft and forgery in Miami — a fact he failed to disclose to his fund’s investors when he solicited them.