Compliance

SEC Charges Man Involved In Fraudulent Scheme To Secure Business Of Venezuelan Bank

Eliane Chavagnon Reporter 17 June 2013

SEC Charges Man Involved In Fraudulent Scheme To Secure Business Of Venezuelan Bank

The Securities and Exchange Commission has charged Ernesto
Lujan, the former head of the Miami,
FL, office at brokerage firm
Direct Access Partners, for his part in a “massive kickback scheme” to secure the bond
trading business of Banco de Desarrollo Económico y Social de Venezuela.

Last month the US authority charged four
individuals it says enabled the global markets group at DAP to generate
more than $66 million in revenue from transaction fees related to fraudulent
trades executed for Caracas-based BANDES.

A portion of that revenue was allegedly paid to the vice
president of finance at BANDES, who authorized the fraudulent trades.

The SEC now alleges that as managing partner of the global
markets group, Lujan was an “integral participant” in the scheme, which it
added included sham arrangements to hide the kickback payments and route money
to the BANDES official via shell corporations.

In a parallel action, the US Attorney's Office for the Southern District of New York has announced criminal charges against Lujan.

The SEC’s amended complaint charges Lujan and the four other
defendants with fraud. It is seeking final judgments that the authority says
would require them to return ill-gotten gains, with interest, as well as to pay
financial penalties.

The SEC's investigation continues. 

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