On October 7, 2025, the U.S. Securities and Exchange Commission (SEC) obtained a final judgment against Cyrus P. Naderi of The Woodlands, Texas. The case, filed in the Southern District of Texas (No. 4:25-CV-03122), involved Naderi’s participation in a ‘free-riding’ trading scheme. This scheme involved making stock trades without having enough funds to cover the transactions.
According to the SEC, between April 2021 and March 2024, Naderi made at least $565,000 in deposits to brokerage accounts at four broker-dealers. These deposits came from bank accounts without sufficient funds. The broker-dealers, unaware of this, provided instant deposit credit, allowing Naderi to trade.
Naderi executed several hundred trades, buying and selling securities worth over $22.4 million. Three broker-dealers lost a total of at least $65,770. At the fourth broker-dealer, his trades were cancelled after the deposit was reversed, so he did not receive any profits…