SEC v. Justin Costello and David Ferraro (social media ramps, 2022)

Alleged — pending

These are allegations. SEC has filed an action; nothing in it has been proven, and the respondents have not been found liable. Everything described on this page is what the regulator alleges, not what a court has found. See our editorial policy.

✓ Checked against the primary document on October 4, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, with sampled and disputed records read a second time. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

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In 2022 the SEC brought an action against Justin Costello and David Ferraro over an alleged microcap stock promotion scheme on social media. Ferraro consented to a final judgment on July 11, 2023 (disgorgement $142,724.97 plus interest), and I found no outcome for Costello. A parallel criminal matter is referenced in the release.

The record

What was ordered

Civil penalty

—

Disgorgement

—

Prejudgment interest

—

Total relief

—

Alleged gain

$792k

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 October 6, 2022 as release LR-25552. The respondents named are Justin Costello and David Ferraro (2 individuals, 0 entities). The action was brought in the U.S. District Court, Western District of Washington.

This library tags the matter as social media ramps, based on the conduct the regulator describes. Each tag links to a page explaining how that technique works, what statute it engages, and what penalties comparable actions have attracted. The tagging is ours, not the regulator's: agencies charge statutory provisions, not technique names.

The conduct is recorded against equities.

The release references a parallel criminal proceeding. Where a criminal case exists, the civil and criminal outcomes are recorded separately, because they resolve on different standards of proof.

Partial outcome. SEC Litigation Releases 25572 and 25773 and the court filings record that David Ferraro, the second defendant, consented to a bifurcated settlement on October 31, 2022 (a permanent injunction and a penny stock bar) and that on July 11, 2023 the Western District of Washington entered a final judgment against him for disgorgement of $142,724.97 and prejudgment interest of $11,704.92, with no civil penalty on the strength of his sworn financial statement. I found no primary-source outcome for Justin Costello, the lead defendant, so the record stays at filed; checked on 2026-10-04: no outcome for Costello found on SEC pages.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Social media ramps — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2022-10-06 Litigation release published
2. 2023-07-11 Final judgment entered against co-defendant David Ferraro (disgorgement $142,724.97, interest $11,704.92)

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 litigation release 25773 (Ferraro final judgment)
• Final judgment as to David Ferraro (W.D. Wash.)

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.

Same matter

The library links these 2 records because they appear to concern one matter: the same lead defendant, an overlapping technique tag and close filing dates, or a shared court docket or a release that cites the other. Records are listed by date filed.

This grouping is the library's, made by matching names, techniques, dates and citations when the site is built. It is not the regulator's or a court's determination that the records are one case, and it errs towards missing a link rather than making a false one.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added September 20, 2026. If this matter has since resolved, been withdrawn or been dismissed, we want to know: submit a correction.