It is not often that the SEC’s enforcement docket reads like a crash course in the full spectrum of American financial misconduct. But July brought a trio of cases that, together, chart a tour through the modern landscape of white-collar fraud.

From a senior banking examiner at the Richmond Federal reserve front-running earnings reports, to a longtime adviser who quietly siphoned millions from friends and family while handing them false account statements, to a tech-savvy trader orchestrating over 11,000 wash trades to exploit exchange rebated through virtual servers and cloaked accounts, each case reveals a different flavor of deceit.

Here’s a closer look at each headline-making case and what it signals for market participants and compliance officers alike.

Trading the trust

It is rare for the Fed, a symbol of monetary stability, to find itself entangled in a securities fraud case. But the case SEC v Robert Brian Thompson offered just that: a cautionary tale of institutional betrayal from inside the central banking system.

Thompson, a senior examiner at the Federal Reserve Bank of Richmond, was charged with using confidential supervisory insights to trade on the earnings announcements of two banks under his oversight.

According to the SEC, he bought nearly $700,000 worth of stock in one bank just hours before a market-moving positive earnings report. Months later, he switched tactics, purchasing thousands of put options on another bank’s stock days before that institution disclosed massive loan losses.

Thompson’s trades netted him half a million dollars in illicit profits. The SEC charged him with violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5, alleging classic insider trading.

He ultimately agreed to a bifurcated consent judgment barring future violations, and in July 2025, a final judgment confirmed $584,873 in disgorgement plus $67,750 in interest, satisfied via a parallel criminal forfeiture after Thompson pleaded guilty and was sentenced to two years in prison.

The case not only illustrates the reach of SEC enforcement into regulatory institutions but also the growing coordination among federal watchdogs, including the DOJ and Federal Reserve Inspector General. It’s a stark reminder: even those tasked with watching over markets are not immune from falling to their temptations.

A familiar fraud

If the Richmond Fed case was about institutional betrayal, SEC v Joseph J D’Ambrosio is a study in personal betrayal. Over the span of nearly three decades, D’Ambrosio raised millions of dollars from 19 close friends and relatives for a private fund he managed, Hereford Holdings.

In theory, the fund was designed to invest prudently on their behalf. In reality, it became a personal piggy bank. By at least 2010, according to the SEC’s complaint, D’Ambrosio had begun siphoning off money for his own use, ultimately diverting some $5.5m.

He kept up the charade with false performance reports, painting a picture of profitability while the fund quietly bled dry.

By December 2024, Hereford was nearly insolvent, unable to honor redemption requests. Facing inevitable exposure, D’Ambrosio self-reported to the SEC and other law enforcement.

The Commission charged him with violations of Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act, and Rule 206(4)-8. Without admitting or denying the allegations, D’Ambrosio consented to a permanent injunction; monetary penalties, including potential disgorgement, will be determined at a later date.

The case is emblematic of so-called “affinity fraud,” where trust among friends or family becomes the very instrument of deception. As the SEC continues to highlight, being close to someone doesn’t make them a fiduciary, and fraud often hides behind familiarity.

Machine misuse

The most technologically complex of the three cases, SEC v Suyun Gu et al, centered on what might seem like an obscure corner of market structure – liquidity rebates in options trading. But Gu’s strategy was anything but amateur.

Along with co-defendant Yong Lee, Gu orchestrated thousands of wash trades – artificial buy-sell pairs between accounts he controlled – to exploit the “maker-taker” fee model that incentivizes market liquidity. Between February and April 2021, the pair executed roughly 14,000 trades involving over 3.3 million contracts, generating more than $1.5m in gross rebates.

Gu, who conducted the majority of the trades, allegedly used friends’ brokerage accounts, masked his IP address with virtual private servers, and even continued trading after being warned and having accounts suspended. His defiance was clear: even after Lee ceased trading and sent him an article defining wash trading, Gu doubled down, launching a second phase of the scheme at new brokerages.

The SEC charged him with violations of Sections 9(a)(1) and 10(b) of the Exchange Act and Rule 10b-5, as well as Sections 17(a)(1) and (2) of the Securities Act. In July 2025, a federal court ordered Gu to pay nearly $1.4m in penalties, disgorgement, and interest, and permanently barred him from further violations.

The case reflects the SEC’s sharpened focus on abuses of market plumbing, where algorithmic knowledge meets regulatory evasion.