Publications & Sites 
Dist. 225 trustee, brother agree to trading settlement
what It means
WHO: Trustee Jeffrey Wolfson, Glenbrook School District 225
WHAT: agreed to pay $13.4 million for illegal trading
WHO SAYS?: U.S. Securities and Exchange Commission
Updated: August 20, 2012 11:29AM
A trustee for Glenbrook School District 225 and his brother have agreed to pay more than $14.5 million to settle illegal trading charges against them.
On Tuesday, the U.S. Securities and Exchange Commission said the trustee, Northbrook resident Jeffrey Wolfson, and Robert Wolfson of Massachusetts, engaged in naked short selling.
In committing the violation, they failed to locate shares involved in short sales and did not close out the resulting failures, according to a news release from the SEC.
“SEC rules require short sellers to locate shares to borrow before selling them short, and they must purchase securities to close out their failures to deliver by a specified date,” said the release from Washington, D.C.
“The Wolfsons made approximately $9.5 million in illegal profits from their naked short selling transactions,” it added.
The federal charges publicly surfaced in February.
Under the settlement, the brothers did not admit or deny the violations.
Still, Jeffrey Wolfson is required to pay $13.4 million and will be suspended from working in securities for 12 months.
Robert Wolfson and Golden Anchor will pay $1 million, and he is suspended for four months.
The SEC said Robert Wolfson conducted illegal naked short sales while trading through an account at New York-based broker-dealer Golden Anchor Trading II LLC that also has been charged in the SEC’s enforcement action.
The firm has changed its name to Barabino Trading LLC.
Jeffrey Wolfson engaged in illegal short sales while working as a Chicago broker-dealer and later as the principal trader at a Chicago broker-dealer no longer in business.
“He also taught his brother and others how to do it,” stated the SEC.
Jeffrey Wolfson said in a recorded telephone conversation, “What I sell them is not guaranteed, it never gets delivered. It’s funny paper,” said the SEC, adding the transactions were July 2006 to July 2007.
Jeffrey Wolfson was unavailable for comment this week, and he did not attend Monday’s school board meeting at Glenbrook North High School in Northbrook.
On whether he will remain a trustee, District 225 spokeswoman Karen Geddeis did not know.
“The Board of Education has not discussed this matter, nor has a closed session agenda been scheduled to do so at this time.”
Before the agreement to settle, federal hearings were scheduled in New York City from June 18 to June 29.
Jeffrey has been on the Chicago Board Options Exchange since 1980.
As a high school trustee, he serves on the finance committee, and his term ends in 2013.
According to the school district’s website, Wolfson is a board member of the YMCA of Greater Chicago, The Children’s Memorial Research Center and the District 225 Foundation, of which he is a founding member.
He also is president and founder of the Linda and Jeffrey Wolfson Foundation.
He served as the treasurer of the successful 2006 pro-referendum community committee VOTE, as a member of the Booster Club, the Choir Parents Organization and the Men of GBN.
