SEC v. Salvadore D. Palermo (sham inventory sales, 2018)

Judgment entered

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In August 2018 the SEC sued former J.P. Turner fixed-income trader Salvadore Palermo over fictitious sales entries that hid inventory. A final judgment entered on 22 October 2018 in the Northern District of Georgia permanently enjoins him from violating the broker-dealer record-keeping rules; no money amount appears in the SEC order that describes it.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

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Alleged gain

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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 August 8, 2018 as release LR-24229. The respondents named are Salvadore D. Palermo (1 individual, 0 entities).

The complaint alleges that Palermo bought certificates of deposit from customers at above-market prices, then over seven months from August 2014 entered dozens of trades suggesting they were sold from inventory to a counterparty who never agreed to buy and which would be cancelled, so the firm's trade blotters and FOCUS reports were inaccurate. These were booking entries to evade internal limits, not trades with a same-owner counterparty.

This library applies no technique tag to the matter. The conduct is falsified bookkeeping to avoid inventory limits, not market-facing wash trading.

An SEC administrative order from November 2018 reports the outcome. It says a final judgment was entered against Palermo on 22 October 2018 in the Northern District of Georgia, permanently enjoining him from violating the broker-dealer books-and-records and reporting rules, and it opened follow-on proceedings to decide whether to bar him. The order does not say whether he consented, and it states no disgorgement or penalty, so no money is recorded. We did not see the judgment itself or the result of the follow-on proceedings.

Timeline

1. 2018-08-08 Litigation release published
2. 2018-10-22 Final judgment entered enjoining Palermo (reported in SEC order of 9 November 2018)

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 administrative order instituting proceedings against Palermo

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.

Record added September 10, 2026. submit a correction.