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‘Rogue Informant’ Sues SEC Over Retaliatory Subpoenas

Accusing the Securities and Exchange Commission of retaliating against him for “going rogue,” former informant Guy Gentile brought a federal complaint Friday to quash old subpoenas against him.

NEWARK, N.J. (CN) - Accusing the Securities and Exchange Commission of retaliating against him for “going rogue,” former informant Guy Gentile brought a federal complaint Friday to quash old subpoenas.

Represented by the Manhattan firm Ford O’Brien, Gentile is former day trader who found himself in the FBI’s crosshairs in 2012 over a textbook pump-and-dump scheme.

As detailed in a 2017 Bloomberg profile, Gentile said his arrest resulted in a three-year stint as an informant that “led to dozens of arrests and helped prevent hundreds of millions of dollars in potential fraud losses.”

Once his list of targets wore thin in 2015, however, Gentile balked at the prospect of pleading guilty to a felony stemming from the original charges.

Gentile then played his trump card — he had been taping his conversations with his FBI handlers — only to find himself rearrested on charges related to the original pump-and-dump scheme.

Friday’s complaint against the SEC notes that both his indictment and a parallel SEC civil complaint were ultimately tossed as untimely, but that his persecution by the SEC continues.

“This action specifically seeks to quash several subpoenas and any evidence obtained through them that was served on Mr. Gentile, his lawyer, his trustee, his bank, his company’s vendors and clients, and other individuals and entities served pursuant to the Traders Café FOI [Formal Order of Investigation],” the complaint states. “This action also seeks a declaration ordering the SEC to cease its unauthorized ‘investigation,’ which is clearly an abuse of process. The actions taken by the SEC staff at the Miami Regional Office are improper and plainly not for any legitimate law enforcement purpose. Rather, they are demonstrably intended solely for the purpose of harassment and to retaliate against Mr. Gentile for stopping his full-time cooperation with the SEC in 2015 and previously defeating both a Department of Justice Indictment and the SEC in civil litigation last year, which resulted in curtailing the SEC’s ability to file untimely complaints. The SEC appears to also be retaliating against Mr. Gentile for his critical public statements about the agency and for whistleblowing against an SEC employee.”

Calling it clear that the law is on his side, the complaint says “the SEC is simply harassing Mr. Gentile and those connected to him.”

“If the SEC had any evidence and actually intended to protect investors or otherwise fulfill any of its other statutory obligations, it would have taken action against Mr. Gentile years ago,” the complaint continues. 

Gentile blames the SEC’s subpoenas for having caused multiple banks and vendors to stop doing business with him.

“Mr. Gentile is familiar with this form of government abuse of process and the practice of these follow-on harassment procedures because, of his time cooperating with the government,” the complaint states.

Representatives at the SEC did not return an email seeking comment Friday afternoon.

The complaint identifies Gentile as a resident of San Juan, Puerto Rico, who owns a broker-dealer business in the Bahamas. 

A Westchester native, Gentile launched the now-defunct website following his 2015 rearrest. Around the same time he made a song about snitching where he rapped: “The feds don’t know who they got, bro/ I’m going rogue.” 

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Categories / Civil Rights, Criminal, Financial, Government, Securities

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