SEC Files Subpoena Enforcement Action Against Real Estate Broker

The Securities and Exchange Commission (SEC) has announced the initiation of legal action against Brandon Charnas, a real estate broker based in New York and South Florida. The SEC is seeking an order from the U.S. District Court for the Southern District of Florida, directing Charnas to comply with an investigative subpoena for documents.

The SEC’s investigation is focused on potential insider trading violations related to the securities of The ODP Corporation, known as Office Depot, leading up to an announcement made by USR Parent, Inc., also known as Staples, on Monday, January 11, 2021, regarding its offer to acquire ODP. According to the application filed by the SEC, Charnas acquired ODP common stock and out-of-the-money call options a few weeks before the official announcement, resulting in profits of at least $385,000. Notably, on December 23, 2020, the application reveals that Charnas was involved in communications with other traders in ODP, during which he purchased out-of-the-money call options, accounting for approximately 90% of ODP’s overall call option trading volume that day.

The SEC’s application indicates that Charnas has asserted his Fifth Amendment privilege improperly and has failed to fulfill the document production obligations as required by the subpoena. Therefore, the SEC’s application seeks an order from the court to compel Charnas to provide the requested documents. It is important to note that the SEC’s investigation is ongoing, and at this stage, no conclusion has been reached regarding any individual or entity’s violation of federal securities laws.