SEC v. Lek Securities Corporation, Samuel Lek, Avalon FA Ltd, Nathan Fayyer and Sergey Pustelnik (layering, 2017 ruling)

Judgment entered

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In 2017 the SEC charged Lek Securities, its CEO Samuel Lek, the Ukraine-based trading firm Avalon FA Ltd and two principals over layering and cross-market manipulation. Lek Securities and Sam Lek settled in 2019; a jury found Avalon, Nathan Fayyer and Sergey Pustelnik liable in November 2019, and the court ordered $7.5 million in penalties against each.

The record

What was ordered

Civil penalty

$23.9m

Disgorgement

—

Prejudgment interest

—

Total relief

$23.9m

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 SEC announced this matter on August 29, 2017 (release LR-23923). The respondents named are Lek Securities Corporation, Samuel Lek, Avalon FA Ltd, Nathan Fayyer and Sergey Pustelnik (3 individuals, 2 entities). A federal judge denied Lek Securities and its CEO's motion to dismiss, holding the alleged layering and cross-market schemes would violate the antifraud and manipulation provisions if proved.

Outcome: on October 1, 2019 the court entered consent judgments against Lek Securities and Sam Lek (release LR-24639): a $1 million penalty plus $525,892 in disgorgement and prejudgment interest for the firm, a $420,000 penalty for Sam Lek, injunctions, a three-year compliance monitor, and associational and penny stock bars for Sam Lek with a right to reapply after ten years; they admitted that Avalon's trading through the firm violated the securities laws. The SEC's later release LR-25427 reports that a jury on November 12, 2019 found Avalon, Fayyer and Pustelnik liable for layering and cross-market manipulation, that an amended final judgment entered February 9, 2021 ordered each to pay $7.5 million in penalties, and that the Second Circuit affirmed on June 15, 2022. The penalty total stored here, $23.92 million, is the sum of those five penalties; the $525,892 is a combined disgorgement and interest figure and is not stored separately.

This library tags the matter as layering, based on the conduct the regulator describes. The tagging is ours, not the regulator's: agencies charge statutory provisions, not technique names. The release uses "undisclosed control" only for Pustelnik's alleged hidden interest in Avalon, not for concealed stock blocks, so no control-blocks tag applies.

What technique is this, and how does it work?

This action is tagged with one technique 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.

• Layering — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2017-08-29 Litigation release published
2. 2019-10-01 Consent final judgments entered against Lek Securities and Samuel Lek
3. 2021-02-09 Amended final judgment against Avalon, Fayyer and Pustelnik after jury verdict; $7.5 million penalty each
4. 2022-06-15 Second Circuit affirms the judgment against Avalon, Fayyer and Pustelnik

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 LR-24639 (Lek Securities and Sam Lek settlement)
• Amended final judgment (S.D.N.Y., February 9, 2021)
• SEC litigation release LR-25427 (Second Circuit affirmance)

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.