SEC Sues Ronald A. Pallek Over $1.54M 'Iron Condor' Fraud.
The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Ronald A. Pallek for orchestrating a fraudulent securities offering that raised over $1.54 million from investors.
Alleged Fraudulent Activity
Filed on March 10, 2025, at the Wisconsin Eastern District Court, the SEC’s complaint accuses Pallek of making false promises to investors, claiming he could double their money in one year using an “Iron Condor” options trading strategy. The lawsuit reveals that between February 2021 and September 2023, Pallek raised funds from at least 87 investors.
False Promises and Misrepresentation
According to the SEC’s filings, Pallek misled investors about the risks involved in his trading strategy, lied about how he would use their funds, and falsely assured them that he had enough reserve funds to cover any potential losses.
Pallek allegedly sent fake account statements showing profitable trading results, while in reality, he lost approximately $991,000 through trading options and other securities.
Ponzi-Like Scheme and Fake Documents
To cover up his losses, Pallek reportedly used some investor funds to make Ponzi-like payments to earlier investors. When some investors requested the return of their funds in the fall of 2023, Pallek falsely claimed that his bank accounts had been frozen.
He also provided fabricated documents showing that his accounts contained over $1.25 million.
Legal Violations
The SEC’s complaint highlights several violations, including:
- Section 17(a) of the Securities Act of 1933
- Section 10(b) of the Securities Exchange Act of 1934
- Rule 10b-5
- Section 206(4) of the Investment Advisers Act of 1940
- Rule 206(4)-8
The SEC seeks a permanent injunction to prohibit Ronald A. Pallek from engaging in any further securities fraud, along with disgorgement, prejudgment interest, and civil penalties.
