SEC v. optionsXpress, Inc., Thomas E. Stern and Jonathan I. Feldman (Regulation SHO, 2013)

Judgment entered

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In June 2013, an SEC administrative law judge found that optionsXpress, Inc. violated Regulation SHO Rule 204 and aided and abetted fraud by customer Jonathan I. Feldman, and ordered disgorgement and penalties against the firm, Feldman and compliance officer Thomas E. Stern.

The record

What was ordered

Civil penalty

$4.1m

Disgorgement

$4.2m

Prejudgment interest

—

Total relief

$8.3m

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 this matter on June 7, 2013 as release 3-14848. The respondents named are optionsXpress, Inc., Thomas E. Stern and Jonathan I. Feldman (2 individuals, 1 entity).

The proceeding concerns the period from October 2008 to March 2010. The initial decision finds that optionsXpress failed to close out fails to deliver under Rule 204 and facilitated Feldman's buy-write trading strategy, which it found fraudulent, and that Stern caused and aided those violations. The decision does not describe matched orders or wash trades.

This library tags the matter as naked short selling debate, based on the conduct the regulator describes. Each tag links to a page explaining how that technique works, what statute it engages, and what penalties comparable actions have attracted. The tagging is ours, not the regulator's: agencies charge statutory provisions, not technique names.

optionsXpress: disgorgement of $1,574,599 and a $2 million penalty. Feldman: disgorgement of $2,656,377 and a $2 million penalty. Stern: a $75,000 penalty and an industry and penny stock bar. Prejudgment interest runs on the disgorgement. The record totals $4,075,000 in penalties and $4,230,976 in disgorgement.

This is an administrative law judge's initial decision that became final on a later Commission order of finality; findings are those of the judge.

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.

• The naked short selling debate — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2013-06-07 Initial decision

Primary documents

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

• Initial decision (ID-490)
• Order instituting proceedings
• Finality order

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.

Related actions

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

Record added September 10, 2026. submit a correction.