FINRA Alleges Sidney Lebental Engaged in Spoofing

Sidney Lebental (CRD #: 5543658), a broker formerly registered with BofA Securities, was recently investigated by FINRA, according to his BrokerCheck record, accessed on March 9, 2023. Read on if you have questions about his alleged conduct as a broker.

FINRA Investigation

On December 22, 2022, FINRA entered a preliminary determination recommending disciplinary action against Sidney Lebental, alleging that he engaged in “spoofing.” 

FINRA alleged that Sidney Lebental entered and quickly canceled a large and fully-displayed non-bona fide order in 30-year bonds in order to induce others to trade against his legitimate 30-year bond or Ultra Bond futures orders on the other side of the market, frequently at more favorable prices.

FINRA alleged that, through this misconduct, Sidney Lebental violated the following regulations:

• Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder
• Section 9(a)(2) of the Exchange Act
• FINRA Rules 2020, 5210, 5210.01, and 2010

FINRA further alleged that Sidney Lebental contravened Sections 17(a)(1) and (a)(3) of the Securities Act of 1933.

The Securities Exchange Act of 1934

Section 10(b) of the Securities Exchange Act of 1934 forbids the use of manipulative or deceptive practices in relation to the purchase or sale of securities. Within this section, Rule 10b-5 prohibits fraudulent schemes, as well as untrue statements and misleading omissions of fact.

Section 9(a)(2) prohibits the manipulation of security prices by executing transactions to create the appearance of (or actual) trading activity in order to induce others to buy or sell it. It also prohibits the raising or lowering of the price of a security for the same purpose.

The Securities Act of 1933

Sections 17(a)(1) and (a)(3) of the Securities Act of 1933 ban the use of deceptive schemes or practices to defraud customers in the securities business.

FINRA Rule 2020

FINRA Rule 2020 bans the use of fraudulent tactics, like deception or manipulation, as they relate to the purchase and sale of securities.

FINRA Rule 5210

FINRA Rule 5210 prohibits members from publishing or circulating any communication that claims to report any securities transaction or price of a security unless the member believes the transaction is bona fide.

Rule 5210.01 specifically bans the publication/circulation of non-bona fide transactions or price quotes of securities with manipulative, deceptive, or otherwise fraudulent purposes.

FINRA Rule 2010

FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.

Background Information

Sidney Lebental has passed the following exams:

• Series 63 – Uniform Securities Agent State Law Examination
• SIE – Securities Industry Essentials Examination
• Series 7 – General Securities Representative Examination
• Series 10 – General Securities Sales Supervisor – General Module Examination
• Series 24 – General Securities Principal Examination

He previously worked for the following firms:

• BofA Securities (CRD#:283942)
• Merrill Lynch, Pierce, Fenner & Smith (CRD#:7691)
• Deutsche Bank Securities (CRD#:2525)

Kurta Law Can Help

If you worked with Sidney Lebental and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.

For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.