SEC v. Eduardo Hernandez (free riding and parking, 2025)

Judgment entered

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In July 2025 the SEC announced a final consent judgment against Eduardo Hernandez, alleged mastermind of a $2 million free-riding scheme using at least 600 accounts. He is liable for $525,355 disgorgement and $122,996 interest, deemed satisfied by criminal restitution, with a trading injunction.

The record

What was ordered

Civil penalty

—

Disgorgement

$525k

Prejudgment interest

$123k

Total relief

$648k

Alleged gain

—

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 July 3, 2025 (litigation release 26340) that on June 30, 2025 the Eastern District of New York entered a final judgment against Hernandez in the case filed October 31, 2023.

The complaint alleged he was the mastermind of a scheme from about November 2018 to January 2022 in which unfunded loser accounts at a broker giving instant deposit credit traded with winner accounts at manipulated prices in thin options, shifting the broker's credit into profits, with at least 600 accounts used; he allegedly recruited people to open the loser accounts and directed profits to himself. A bifurcated consent judgment of September 24, 2024 had enjoined him and barred trading in accounts without settled cash. The final judgment reimposes that relief and orders disgorgement of $525,355 and interest of $122,996, deemed satisfied by the restitution order in the parallel criminal case. This library tags the matter as free riding and matched orders, since the complaint describes matched trading between the accounts.

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.

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. 2025-07-03 Litigation release published

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

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.