The SEC
charged the former head of the Miami office at brokerage firm Direct Access
Partners (DAP) for his role in a massive kickback scheme to secure the bond
trading business of a state-owned Venezuelan bank.
The SEC charged
four individuals last month who enabled
the global markets group at DAP to generate more than $66 million in revenue
from transaction fees related to fraudulent trades they executed for Banco de
Desarrollo Económico y Social de Venezuela (BANDES). A portion of this revenue
was illicitly paid to the Vice President of Finance at BANDES, who authorized
the fraudulent trades.
The SEC alleges that the
managing partner of the global markets group was an integral participant in the
wide-ranging fraudulent scheme that included sham arrangements to hide the
kickback payments and route money to the BANDES official through shell
corporations. The managing partner and others charged in the scheme deceived
DAP's clearing brokers, executed internal wash trades, interpositioned another
broker-dealer in the trades to conceal their role in the transactions, and
engaged in massive roundtrip trades to pad their revenue.
"For a scheme this bold
to succeed, it required the sneaky collaboration of several individuals
including the head of the Miami office," said Andrew M. Calamari, Director
of the SEC's New York Regional Office. "[The managing partner] and the
others may have believed they were covering their tracks, but the SEC's exam
and enforcement teams unraveled their fraud."
In a parallel action, the
U.S. Attorney's Office for the Southern District of New York announced criminal
charges against the managing partner.
The attorneys at Sallah Astarita & Cox, LLC have decades of experience in securities fraud investigations and in defending white collar criminal cases. For more information contact us by email or visit our website at www.sallahlaw.com. For more information on this case, visit SEC Announces More Charges in Massive Kickback Scheme to Secure Business of Venezuelan Bank.
