Penny stock case may hold key to SEC dealer definitions push

Court ruling could set precedent for legal battles over controversial proposal

Securities and Exchange Commission
SEC commissioners are slated to vote in April on the proposal
Photo: Andriy Blokhin/Alamy Stock Photo

The US Securities and Exchange Commission’s proposal to expand the range of firms required to register as securities dealers could hinge on an overlooked Florida court case involving a penny stock trader.

The US Court of Appeals for the Eleventh Circuit is to hear an appeal filed by Ibrahim Almagarby and his company, Microcap Equity Group, which were charged by the SEC in 2017 with acting as unregistered dealers in penny stock issuers’ securities.

Buy-siders and legal experts believe the

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