The SEC has settled charges with former financial advisor Andrew Komarow, who was known in the industry for working with special needs families and neurodivergent individuals.
The settlement calls for Komarow, who was charged with a $6.9 million free-riding scheme, to be barred from working with any broker-dealer, investment advisor and other investment professionals. It also bars him from participating in any penny stock offerings.
The SEC on Dec. 8 charged Komarow with conducting the free-riding scheme from October 2022 to January 2023. Prior to that, Finra in June barred Komarow after he refused to fully cooperate with the agency’s own investigation of the alleged activities.
According to the SEC complaint, Komarow made unfunded electronic transfers totaling $6.9 million from bank accounts to accounts at four broker-dealers, knowing that he lacked sufficient funds to cover the transfers. Komarow immediately traded securities using funds that the brokerage firms made temporarily available while the fraudulent transfers were pending, the SEC alleged. The free-riding trades were mostly unprofitable, but he was able to withdraw at least $615,031 from the accounts, leaving the brokerage firms with losses totaling over $3 million, the SEC said.
