SEC v. Frank M. Cerisano Jr. — U.S. Securities and Exchange Commission Litigation Release No. 26606, dated August 10, 2026.
The SEC charged Frank M. Cerisano Jr. for a four-year spoofing scheme where he placed non-bona fide orders to manipulate stock prices and then executed profitable trades. He generated approximately $1.1 million in illicit gains before being caught and agreeing to a settlement.
In Plain English
Imagine someone placing fake buy and sell orders for a popular toy to make it look like everyone wants it. Then, they quickly sell the toy at the inflated price they created, before canceling their fake orders. Frank Cerisano Jr. did this with stocks, making over $1.1 million before the SEC stopped him.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
How the Alleged Scheme Worked
- Initiating the Scheme From at least May 2021 to April 2025, Frank M. Cerisano Jr. engaged in a manipulative stock trading scheme known as spoofing. He would place non-bona fide 'spoof' orders that he did not intend to execute.
- Artificial Price Movement These spoof orders were placed on one side of the market to artificially move the stock price in a direction of his choosing. This created a false appearance of market interest or activity.
- Executing Profitable Trades Cerisano then placed and executed bona fide orders on the opposite side of the market, taking advantage of the artificial price movements he had created. These were the trades intended to generate profit.
- Canceling Spoof Orders After his profitable trades were executed, Cerisano would quickly cancel his initial non-bona fide spoof orders, leaving the market with the executed trades at manipulated prices.
- Exploiting Extended Hours Cerisano's scheme often involved trading during extended hours when fewer shares are traded, making it easier to influence stock prices with his spoof orders.
- Using Multiple Broker Accounts To avoid detection, Cerisano coordinated the use of accounts at multiple broker-dealers. He typically entered spoof orders through 'helper' accounts and profitable orders through a 'winner' account at a different firm.
- Ignoring Broker Warnings A broker-dealer warned Cerisano about his apparently manipulative trading and ultimately closed his account. Despite this, Cerisano continued his spoofing scheme at other broker-dealers.
- Resuming at New Firms After his account was closed, Cerisano used multiple accounts at other broker-dealers to continue his spoofing scheme, employing the same 'helper-winner' structure.
- Generating Ill-Gotten Gains Through this repeated pattern of spoofing and profitable trading, Cerisano generated approximately $1,115,672 in ill-gotten gains over the four-year period.
The Enforcement Action
On August 10, 2026, the SEC filed settled charges against Frank M. Cerisano Jr. for allegedly conducting a manipulative stock trading scheme known as spoofing over a four-year period, generating approximately $1,115,672 in ill-gotten gains. Without admitting the allegations, Cerisano consented to a final judgment that would permanently enjoin him from violating securities laws, order him to pay disgorgement of $1,115,672 plus prejudgment interest of $26,472.82, and a civil penalty of $334,701.60. The judgment would also prohibit Cerisano from opening or trading in brokerage accounts for five years without providing brokers with a copy of the complaint and judgment.
Named in this action: Frank M. Cerisano Jr..