Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Tuesday, March 8, 2011


The SEC announced that on March 8, 2011, it filed a civil injunctive action in the United States District Court for the Northern District of Illinois against Joseph A. Dawson, the president and owner of Dawson Trading, LLC. Dawson purportedly operated Dawson Trading as a pooled investment vehicle to invest in securities including, stocks, bonds, commodities, currencies, and options for family and friends. The SEC alleges that Dawson used Dawson Trading to perpetrate a fraudulent offering scheme through which he raised approximately $3.8 million. The SEC further alleges that Dawson, after misappropriating confidential information from a family member regarding a pending acquisition of SPSS Inc. by International Business Machines Corporation (“IBM”)¸ caused Dawson Trading to purchase call options of SPSS, reaping profits of $437,770.

Dawson has agreed to settle the SEC’s charges without admitting or denying the allegations. Dawson has consented to the entry of a final judgment, subject to the Court’s approval, permanently enjoining him from engaging in the above violations, and requiring him to pay disgorgement and prejudgment interest.

On November 18, 2010, Dawson pled guilty to three counts of wire fraud for conduct arising out of the fraudulent offering scheme described in the Complaint and on March 8, 2011, Dawson was sentenced to 54 months in prison and was ordered to pay restitution in the amount of $3.3 million.

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