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Miami Investment Fraud Attorney
2655 South Le Jeune Road
Suite 1108
Coral Gables, FL 33134

Three Florida Residents Charged With Investment Fraud

On January 6th, 2022, the Securities and Exchange Commission (SEC) announced investment fraud charges against three Florida residents. According to the federal regulator, the three individuals improperly and unlawfully manipulated the market through insider trading. They made more than $4 million in collective gains through three separate insider trading schemes. In this blog post, our Miami investment fraud attorneys discuss the insider trading charges filed by the SEC.

SEC Charges: Market Manipulation Through Insider Trading

The SEC alleges that three Florida men used a collection of investment companies in order to obtain financial gain through improper insider trading. In a legal complaint filed in the United States District Court for the District of Massachusetts, the SEC filed charges against the following parties:

  • David Schottenstein of Surfside, Florida;
  • Kris Bortnovsky of Surfside, Florida;
  • Ryan Shapiro of Bay Harbor Island, Florida;
  • Sakal Capital Management, LLC; and
  • Sakal U.S. Fund, LLC.

The SEC contends that Mr. Schottenstein was the leader of the insider trading scheme. He reportedly received inside information about a variety of companies over the course of three years, including DSW Inc., the Rite Aid Corporation, and Aphria Inc. The Information was passed on to Mr. Bortnovsky and Mr. Shapiro.

Allegations: Millions in Illicit Gains 

Insider trading is unlawful. Under the Securities Exchange Act of 1934, it is illegal to use material, non-public inside information to make a stock trade of a public company. The SEC alleges that Mr. Schottenstein and his co-conspirators engaged in insider trading ahead of three announcements. Mr. Schottenstein allegedly made $600,000 in illicit gains. Mr. Bortnovsky allegedly made $260,000 in illicit gains, and Mr. Shapiro allegedly made $121,000 in improper gains.

Additionally, Sakal Capital, a company controlled by one of the men, also made insider trading, bringing in more than $3 million in profits. Further trades were also made through the Sakal U.S. Fund. Altogether, the SEC alleges that the trio made more than $4 million through insider trading.

SEC Seeking Civil Penalties for Insider Trading 

In bringing this enforcement action, a representative of the SEC emphasized that the agency will continue to crack down on insider trading to protect the integrity of public markets. Notably, the SEC used a sophisticated data analysis method to uncover insider trading in this case. The agency is now seeking all appropriate penalties against the three Florida individuals and the two investment entities, including permanent injunctions and civil financial penalties.

Call Our Florida Investment Losses Attorneys for Immediate Help

At ​Carlson & Associates, P.A., our Florida securities fraud lawyers are dedicated advocates for investor rights. If you sustained major investment losses because of the unlawful conduct of a broker, brokerage firm, or another party, we are here to help you find the best path to recover financial compensation. Get in touch with us by phone or send us a direct message for a fully confidential review of your legal case. We represent investors in South Florida and beyond.




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2655 South Le Jeune Road
Suite 1108

Coral Gables, Florida 33134

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