SEC denies bid to vacate securities fraud settlement order

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SEC denies vacate fraud settlement

Highlights

Katz's request to vacate the September 27, 2024 SEC securities fraud settlement was denied, as he failed to show compelling circumstances.
The original settlement's sanctions remain, including a cease-and-desist order, a $98,542.97 civil penalty, and $103,940.80 in disgorgement and interest.
An informal payment plan for Katz runs through August 2026, with enforcement stayed as long as monthly payments continue and the settlement terms remain unchanged.

Commission ruling upholds 2024 settlement

As reported by the Securities and Exchange Commission, Katz asked the regulator to set aside a settled order it issued after accepting his settlement offer on September 27, 2024, but the agency says he does not meet the high bar required to overturn a final agreement.

The SEC says courts and the commission have long stressed the strong interest in settlement finality, meaning a party seeking to vacate such an order must show compelling circumstances. In this case, the commission says Katz's arguments, including references to unrelated civil enforcement actions, the severity of the order's consequences and claims that he acted with due care, do not justify modifying the original deal.

The settled order concerns Katz's role as chief operating officer and general counsel of a currency-trading fund he formed with two brothers. The commission found that he violated federal securities laws by providing forged audit materials to prospective investors and by failing to take reasonable steps to confirm the documents were legitimate, despite his limited currency-trading experience, lack of a prior relationship with the brothers and stated concerns about their candor.

Sanctions and payment plan remain in effect

The order leaves intact sanctions that Katz agreed to in his settlement offer, including a cease-and-desist directive, a civil penalty of $98,542.97 and $103,940.80 in disgorgement and interest.

After Katz failed to pay the monetary sanctions, the SEC's Division of Enforcement obtained a district court judgment to enforce the settled order. When he again failed to pay, the parties agreed in August 2025 to an informal payment plan under which Katz makes monthly payments to the commission through August 2026, while the division refrains from taking additional enforcement steps as long as he complies with the plan.

With the motion denied, the SEC says Katz has not demonstrated compelling circumstances sufficient to vacate the settled order, leaving the original settlement and its enforcement framework unchanged.

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