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by Mike Caswell

A Florida jury has found offshore brokerage operator Guy Gentile liable for a scheme that allowed traders to bypass U.S. day-trading rules. The SEC claimed that Mr. Gentile's firm solicited customers who were interested in "circumventing the rules and getting what you want." His business ballooned into a $10-million operation while attracting 40,000 customers, according to the SEC. (All figures are in U.S. dollars.)

The verdict, handed down on Tuesday, July 2, is a setback for Mr. Gentile, who previously beat charges arising from a Canadian OTC Bulletin Board scheme. In that case, the SEC claimed that he helped prepare misleading tout sheets that boosted Vancouver's Raven Gold Corp. to $1.73 in 2007. He protested the charges, saying that the SEC brought the case too late. A judge agreed, and dismissed the matter on Dec. 13, 2017.

Tuesday's verdict arises from a more recent case, which the SEC set out in a complaint filed on March 22, 2021, in federal court in Miami. The SEC claimed that Mr. Gentile ran a brokerage in the Bahamas under the name SureTrader that catered to U.S. customers looking to avoid restrictions on day-trading accounts. It advertised itself as a way to "Avoid the Nasty PDT [pattern day trader] Rule." (Some U.S. day-trading accounts that make use of margin are subject to limits on the amount of buying that can be done in a day.)

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