FINED $3 MILLION FOR FAKING THE TRADE.
NOW HE'S RUNNING $578 MILLION OF YOURS.
He ran liquidity at Lehman Brothers when it took down the global economy. Then he built his own firm — and got fined $3 million for rigging the market.
Michael Edward Bleich was Head of Liquidity Strategy at Lehman Brothers — the bank whose 2008 collapse triggered the worst financial crisis since the Great Depression. Public Record ↗
After Lehman fell, he founded Scout Trading LLC and ran a systematic naked short selling operation across 14 leveraged ETFs, submitting over 255 redemption orders for shares his firm did not own. Regulatory Finding ↗
FINRA and NASDAQ fined him $3,000,000 and found his firm had operated with a near-total absence of compliance infrastructure. Regulatory Finding ↗
“A near-total absence of compliance infrastructure.” — FINRA / NASDAQ Disciplinary Finding · Docket 20100243860 · April 7, 2015
The median FINRA-registered firm carries zero disciplinary actions. Of 3,400+ registered broker-dealers, fewer than 4% have accumulated penalties exceeding $500,000. Scout Trading accumulated $17.3M.
Source: FINRA Industry Snapshot · broker-dealer population data · public record
Documented Red Flags
Verified · Public RecordPermanent Bar:
Exam Fraud
FINRA permanently barred an individual linked to Bleich's CRD record for using an imposter to sit the Series 7 qualifying examination — the foundational licensing gate for U.S. securities professionals. ⚠ Verify — Single Source
A Letter of Acceptance, Waiver and Consent was filed, consenting to findings and a $290,868 fine including $215,868 in disgorgement of ill-gotten earnings. Regulatory Finding ↗
$3M Fine:
Naked Short Empire
On April 7, 2015, FINRA and NASDAQ censured Scout Trading LLC and imposed a $3,000,000 penalty for systematic violations of SEC Regulation SHO — the rule designed to prevent exactly this kind of phantom short selling. Regulatory Finding ↗
Over 26 months, Scout submitted 255+ naked redemption orders totalling 295 million shares, exploiting a T+6 loophole to maintain short positions without ever owning the underlying stock. Regulatory Finding
59%: One Firm
Broke a Market
At its peak, Scout Trading alone accounted for 59% of all market-wide failures to deliver in the Direxion Daily Financial Bear 3X ETF — ticker FAZ — across the entire United States. Regulatory Finding
The operation forced 14 ETFs onto the SEC Threshold Securities List for over 250 consecutive settlement days — a documented, sustained threat to U.S. market settlement integrity. Regulatory Finding
Three Fines in
Eighteen Months
Before the catastrophic $3M FINRA penalty landed, Scout Trading had already been sanctioned three separate times by the Chicago Board Options Exchange: $10,000 in January 2013 for failing to maintain required market-maker quotes; $7,500 in June 2013 for operating without a CCO; and further sanctions in May 2014 for trade-through violations under Regulation NMS. Regulatory Finding
Three exchanges. Three regulators. Three sets of violations. Zero course correction.
The Record
By Fine Amount · Public SourcesMar 2012
The Subjects
Background · Public Record
Duke PhD quant who ran liquidity strategy at Lehman Brothers, founded and destroyed Scout Trading LLC with a $3 million FINRA penalty, and now controls $578 million through a Cayman Islands fund structure built behind a holding company shell. Public Filing
New York attorney and Chair of the Board of Directors of Access Justice Brooklyn — who appeared on active New York Supreme Court litigation filings while holding a suspended California Bar licence with an active Consumer Alert. Regulatory Finding · CA Bar #114924 ↗
Married Michael Edward Bleich at Brooklyn Botanical Garden on April 8, 2006. Practises as a psychotherapist in New York City. Public Record
Follow The Money
EntryPoint Capital LLC · Public FilingsHalf a billion dollars. A Cayman Islands shell. A former NYSE chief as the public face. And the man who ran naked shorts on 295 million shares as the one calling every trade.
EntryPoint Capital manages assets for only 3 to 4 pooled investment vehicles — a concentrated client base with acute vulnerability to single-source withdrawal pressure. Public Filing · Form ADV ↗
Any institutional limited partner conducting standard operational due diligence would find a CIO carrying $17,313,368 in documented regulatory penalties across six documented enforcement events spanning three exchanges and two regulators. Regulatory Finding · S-01 through S-05 ↗
The firm's SEC registration was approved in July 2024 — nine years after the $3,000,000 FINRA penalty that effectively destroyed its predecessor enterprise, with all five sanctions still permanently on record. Public Filing Regulatory Finding
EntryPoint Capital LLC reported $578,038,743 in regulatory assets under management in its most recent Form ADV filing dated March 2025 — managing capital for just 3 to 4 pooled investment vehicles.
Its 13F equity portfolio — 639 long positions valued at $256.36 million — generated a 3-year annualised return of 4.73% on its top 50 unweighted holdings, against an S&P 500 that returned approximately 10–12% over the same period.
EntryPoint Capital LLC is not owned directly by Michael E. Bleich — but indirectly, through a holding vehicle called EntryPoint Partners LP, established in October 2020. Public Filing
The structure places at least two corporate layers between the beneficial owner and any direct regulatory or legal exposure at the operational level. Alleged Characterisation
Lawrence Edward Leibowitz — former COO of NYSE Euronext, Princeton alumnus, and current board member of three publicly listed financial technology companies — serves as CEO of EntryPoint Capital with a less-than-5% ownership stake. Public Filing · Form ADV ↗
The forensic dossier characterises his appointment as a calculated reputational insulation strategy: Leibowitz's institutional credibility functions as a public-facing buffer, distancing the firm's marketed identity from the regulatory history of the CIO who controls all trading decisions. Alleged Characterisation · Forensic DD Report
Bleich remains the central figure — the architect of every trading model, the indirect owner of the firm, and the single individual whose documented history remains the material fact that no amount of organisational structure can erase. Alleged Characterisation