SEC v. Eduardo Hernandez, Christopher Flagg, Daquan Lloyd and Corey Ortiz (free riding and parking, 2024)

Settled

✓ Checked against the primary document on October 4, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, with sampled and disputed records read a second time. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

Report an error in this record (sec-eduardo-hernandez-et-al-free-riding-and-parking-2024) by email

In October 2023 the SEC charged Eduardo Hernandez, Christopher Flagg, Daquan Lloyd and Corey Ortiz over an alleged free-riding scheme. Final consent judgments were entered between June 2025 and August 2026, with disgorgement of about $1.16 million in total, treated as satisfied by criminal orders.

The record

What was ordered

Civil penalty

—

Disgorgement

$1.2m

Prejudgment interest

$185k

Total relief

$1.3m

Alleged gain

$2m

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

The Securities and Exchange Commission announced on April 4, 2024 (litigation release 25967) a complaint filed on October 31, 2023 in the Eastern District of New York against Hernandez, Flagg, Lloyd and Ortiz.

The SEC alleges that from about November 2018 to January 2022 the defendants opened unfunded loser accounts at a broker that gave instant deposit credit and used the credit to trade thinly traded options at manipulated prices with winner accounts they also controlled, transferring the broker's credit into guaranteed profits for the winners, using at least 600 accounts and generating more than $2 million. Hernandez and Flagg are charged under Section 10(b), Rule 10b-5(a) and (c) and Section 20(b); Ortiz and Lloyd with aiding and abetting. The complaint asked for injunctions, conduct-based injunctions, disgorgement and penalties. At filing these were allegations.

This library tags the matter as free riding and matched orders, since the complaint describes matched trading between the accounts. The record's defendant field held only "Eduardo Hernandez et al."

For the regulator's own account of the facts, read the primary document linked above. This page deliberately summarises the structured record rather than reproducing the release.

Three SEC releases report the final consent judgments. Hernandez's was entered June 30, 2025: disgorgement of $525,355 and interest of $122,996, plus a five-year conduct-based injunction on opening brokerage accounts without disclosure. On April 27, 2026 judgments were entered for Flagg ($56,390 plus $5,570 interest) and Lloyd ($376,050 plus $37,145.75). On August 25, 2026 a judgment was entered for Ortiz ($199,710 plus $19,727). Each amount is treated as satisfied by restitution and forfeiture orders in United States v. Hernandez et al.

The stored money fields sum the four defendants, and the recorded date is the last judgment. The releases describe the underlying conduct as allegations; no trial findings are reported. Hernandez, Flagg and Ortiz also have their own records in this library.

What technique is this, and how does it work?

This action is tagged with 2 techniques in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Free riding and parking — see how it works, what statute it engages, and every other action tagged the same way.
• Matched orders — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2024-04-04 Litigation release published
2. 2025-06-30 Final consent judgment entered against Eduardo Hernandez
3. 2026-04-27 Final consent judgments entered against Christopher Flagg and Daquan Lloyd
4. 2026-08-25 Final consent judgment entered against Corey Ortiz

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEC litigation release
• SEC litigation release (Hernandez judgment)
• SEC litigation release (Flagg and Lloyd judgments)
• SEC litigation release (Ortiz judgment)

The linked release is a work of the United States government and is not subject to copyright. Our summary and narrative above are our own writing.

Same matter

The library links these 4 records because they appear to concern one matter: the same lead defendant, an overlapping technique tag and close filing dates, or a shared court docket or a release that cites the other. Records are listed by date filed.

This grouping is the library's, made by matching names, techniques, dates and citations when the site is built. It is not the regulator's or a court's determination that the records are one case, and it errs towards missing a link rather than making a false one.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added September 10, 2026. submit a correction.