U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21704 / October 21, 2010
Securities and Exchange Commission v. Jose O. Vianna, Jr. and Creswell Equities, Inc., Case No. 10 Civ. 1842 (GBD) (S.D.N.Y.)
FORMER BROKER AND HIS CUSTOMER SETTLE CHARGES ARISING FROM SCHEME TO DEFRAUD INSTITUTIONAL CUSTOMER
The Securities and Exchange Commission today announced that on September 27, 2010, the Honorable George B. Daniels of the United States District Court for the Southern District of New York entered a partial judgment against Defendant Jose O. Vianna, Jr., a former registered representative of Maxim Group LLC, a registered broker-dealer. On September 20, 2010, Judge Daniels also entered a final judgment against Relief Defendant Creswell Equities, Inc.
The SEC’s complaint, filed on March 9, 2010, alleges that between July 2007 and March 2008, Vianna, while a registered representative at Maxim Group LLC, diverted profitable trades from the account of a large Spanish bank, referred to in the complaint as Customer A, to the account of Creswell, a British Virgin Islands company. The complaint alleges that Vianna simultaneously entered orders in the accounts of Customer A and Creswell to trade the same amounts of the same stock. Each time, he placed a buy order in one customer’s account and a sell order in the other customer’s account. When the market moved to make Customer A’s trade profitable and Creswell’s trade unprofitable, Vianna improperly misused his access to Maxim’s order management system to divert Customer A’s profitable trade to Creswell by changing Maxim’s records to switch the identity of buyer and seller to the trade.
Vianna agreed to settle the SEC’s charges by consenting to the entry of a judgment permanently enjoining Vianna from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and from violating, or aiding and abetting violations of, Section 17(a) of the Exchange Act, and Rule 17a-3 thereunder. In addition, the judgment provides for the payment of disgorgement plus prejudgment interest, and the imposition of civil monetary penalties, in amounts to be determined at a later date.
Creswell agreed to settle the SEC’s claim by consenting to the entry of a judgment ordering Creswell to pay $1,661,650.18 in disgorgement.