UNITED STATES OF AMERICA
In the Matter of
JOAO P. SANTOS,
|ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS|
On April 4, 2002, the Securities and Exchange Commission ("Commission") instituted public administrative proceedings, pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") against Respondent Joao P. Santos ("Santos").
In response to the institution of these administrative proceedings, Respondent Santos has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission or in which the Commission is a party, and without admitting or denying the findings contained herein, except those contained in paragraphs II.A., B., and C. below, which are admitted, Santos consents to the issuance of this Order Making Findings and Imposing Remedial Sanctions ("Order").
On the basis of the Order Instituting Proceedings and the Offer submitted by Santos, the Commission makes the following findings:
A. Joao P. Santos, age 27, is a resident of Philadelphia, Pennsylvania. From November 1997 to June 1999, Santos was a registered representative associated with First Liberty Investment Group, Inc. ("First Liberty"), a broker-dealer registered with the Commission.
B. On January 8, 2001, in the case of United States of America v. Joao Santos, Crim. No. 00-762, in the United States District Court for the Eastern District of Pennsylvania, Santos pled guilty to one count of mail fraud (18 U.S.C. 1341), and was subsequently sentenced to five years probation, fined $10,000 and ordered to make restitution of $12,890. The criminal information alleged that, between September 1998 and June 1999, while employed at First Liberty, Santos improperly diverted approximately $108,000 in customer funds and converted them for his personal use. As part of the fraud, Santos caused monthly account statements to be sent to post office boxes which he had leased so that customers would not learn that Santos had taken the funds which they had invested with First Liberty. He then orally informed the customers whose statements had been diverted that their investments were earning money, and/or delivered false monthly statements to them reflecting gains on the accounts.
C. Santos's criminal conviction arose out of his conduct as an associated person of a broker-dealer, and involved fraud in the purchase or sale of securities and misappropriation of investor funds.
On the basis of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Santos's Offer of Settlement.
Accordingly, IT IS ORDERED that Santos be, and hereby is, barred, pursuant to Sections 15(b) of the Exchange Act, from association with any broker or dealer.
For the Commission, by its Secretary, pursuant to delegated authority.
Jonathan G. Katz
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