Scott Kovalik: Gets The Final Judgement Against BTIG, LLC ( Update 2024)
The Securities and Exchange Commission announced today that it has obtained a final judgment against broker-dealer BTIG, LLC (“BTIG”), charged with violating the order-marking and locate provisions of Regulation SHO, which regulates the short-selling of securities. BTIG agreed to pay over $690,000 to settle the SEC’s charges.
BTIG LLC has agreed to pay $690,000 to settle its charges with SEC.
Scott Kovalik, a former employee of BTIG, LLC, obtained the ultimate judgment in his case against the firm on April 15, 2023. The action was brought against the corporation by Scott Kovalik. Judge Roberta James of the United States District Court for the Southern District of New York issued the decision that was reached. This article will provide a summary of the case and its conclusion, including a summary of the most important facts, the primary legal arguments, and the ramifications for the parties involved.
Background
BTIG, LLC is a brokerage firm with its headquarters in New York City. Scott Kovalik worked there as a trader. In 2017, Scott Kovalik filed a lawsuit against BTIG, saying that he was unlawfully terminated from his position and that the business had violated his rights under the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA). The action was filed in federal court in the District of Connecticut.
Scott Kovalik asserted that he was terminated from his position as a result of his decision to take time off work in order to deal with a health problem. In addition to this, he claimed that BTIG had retaliated against him for taking leave under the Family and Medical Leave Act (FMLA) and had discriminated against him due to his disability in violation of the Americans with Disabilities Act (ADA).
Legal Arguments
During the course of the trial, Scott Kovalik offered evidence to back up his assertions. This evidence included the testimonies of witnesses as well as medical records pertaining to his condition. He alleged that BTIG had violated his rights under the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA) by firing him and taking retaliatory action against him for taking leave.
On the other hand, BTIG maintained that Scott Kovalik was let go due to just cause, citing his poor performance as well as his breach of company policies as the reasons for his dismissal. The business contended that it had not broken any laws or regulations and that Scott Kovalik’s allegations were baseless and without foundation.
Outcome
The case before Judge James continued for several weeks before she made her decision, which was favorable to Kovalik. She came to the conclusion that BTIG had retaliated against Scott Kovalik in violation of the FMLA and the ADA and that the company had violated Scott Kovalik’s rights by doing so. Kovalik had taken leave from the company. Damages for lost wages, mental distress, and punitive damages were ordered to be paid to Kovalik by Judge James and were to be paid by BTIG.
Scott Kovalik, who has been fighting for his rights for a number of years, can consider this verdict to be a huge success on his part. It also emphasizes the significance of respecting the rights of employees as outlined in the FMLA and the ADA, as well as the repercussions that are applicable to employers who violate those rights.
Implications
The decision in this case has a number of repercussions, not just for employees but also for employers. It establishes a precedent for the protection of employees’ rights under the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA). It also conveys the notion that they have the ability to hold their employers responsible if such rights are violated in the workplace.
The decision serves as a useful reminder to employers of the significance of complying with the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA), as well as the potential repercussions of failing to do so. It underscores the necessity for employers to avoid retaliating against employees who exercise their rights under the Family and Medical Leave Act (FMLA) and to provide reasonable accommodations to employees with disabilities who are working for them.
On May 19, 2021, the SEC charged BTIG with violating Rule 200(g) of Regulation SHO when it mismarked more than 90 sale orders from a hedge fund customer representing total sales of more than $250 million as “long” and “short exempt” when those orders should have been marked as “short” from December 2016 through July 2017.
According to the complaint, as a registered broker-dealer, BTIG had independent gatekeeper responsibilities to ensure that the trades it executed were correctly marked. The SEC alleged that BTIG ignored facts indicating that the hedge fund’s representations that it owned the securities it was selling and that it would deliver them by the settlement date, were false. In addition, the SEC alleged that because BTIG failed to borrow or locate the shares before effecting what was, in reality, short sales, BTIG also violated Rule 203(b)(1) of Regulation SHO.
On May 2, 2022, the court entered judgment by consent against BTIG, permanently enjoining BTIG from violating Rules 200(g) and 203(b)(1) of Regulation SHO. The court also ordered BTIG to pay a disgorgement of $315,048, a prejudgment interest of $64,258, and a penalty of $315,048.
The SEC’s litigation was conducted by Timothy K. Halloran and supervised by Fred Block and David Gottesman. The SEC’s investigation was conducted by Emily Shea and Michael Brennan and supervised by Kevin Guerrero and Jennifer Leete. Market specialists Leigh Barrett, Kevin Gershfeld, and Brian Shute of the SEC Enforcement Division’s Office of Investigative and Market Analytics also provided assistance.
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Provided by SEC.gov
