SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 46500 / September 16, 2002
File No. 3-10890
ADMINISTRATIVE PROCEEDING INSTITUTED AGAINST ENRIQUE E. PERUSQUIA
On September 16, 2002, the Commission issued an Order Instituting Public Administrative Proceeding against Enrique E. Perusquia pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 (Exchange Act). The Order alleges that a United States District Court entered a judgment of conviction, pursuant to a guilty plea, against Perusquia for violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The judgment also orders Perusquia to pay restitution of $68 million and a $200 special assessment.
In his written plea agreement, Perusquia admitted that he forged, and caused others to forge, the signatures on the accounts of a wealthy client to make tens of millions of dollars of unauthorized trades in the stocks of a small group of speculative gold mining companies. Perusquia also admitted to forging, or causing others to forge, client signatures to trade on margin, without the clients' knowledge or consent. As a result of Perusquia's conduct, the client lost at least $68 million. Perusquia further admitted that in order to conceal the foregoing and the disastrous results of Perusquia's trading in the gold mining companies and related securities from the client, Perusquia forwarded to him false monthly account statements. In his plea agreement, Perusquia estimated that he received a total of over $1.3 million in cash and over 600,000 shares of stock in undisclosed commissions from his unauthorized trades at both Lehman and PaineWebber. Perusquia also admitted in his plea agreement to misappropriating $1.68 million from the client's accounts.
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Mr. Perusquia an opportunity to dispute these allegations, and to determine what sanctions, if any, are appropriate and in the public interest.