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U.S. Securities and Exchange Commission

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA


Securities and Exchange Commission,

Plaintiff,   

v.

EPG GLOBAL PRIVATE EQUITY FUND, LTD. and ANTHONY F. GIORDANO,

Defendants.   


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COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF

Plaintiff, Securities and Exchange Commission ("Commission") alleges:

INTRODUCTION

1. The Commission brings this action to restrain and permanently enjoin Defendants EPG Global Private Equity Fund, Ltd. ("EPG" or "the Company") and Anthony F. Giordano ("Giordano") (collectively "Defendants") from violating the federal securities laws in connection with their fraudulent and unregistered offering of securities. Beginning in October 2002, the Defendants attempted to raise investor funds throughout the U.S. by offering unregistered securities issued by EPG. To entice investments, the Defendants falsely represented to potential investors that their investment principal was fully guaranteed and that they would receive annual investment returns of between 25% to 70%. The Defendants also falsely claimed that Giordano had over $100 million in assets under management and failed to disclose Giordano's prior disciplinary history.

DEFENDANTS

2. Defendant EPG is a Florida limited partnership with offices in Ft. Lauderdale, Florida. Neither EPG, nor its securities, have ever been registered with the Commission.

3. Defendant Giordano, 27, resides in Boca Raton, Florida. Giordano was chief executive officer of EPG and managed the Company's day-to-day operations. In June 2002, the National Association of Securities Dealers ("NASD") barred Giordano from association from any of its member firms.

JURISDICTION AND VENUE

4. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d) and 22(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. 77t(b), 77t(d) and 77v(a); Sections 21(d), 21(e), and 27 of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. 78u(d), 78u(e) and 78aa; and Section 214 of the Investment Advisers Act of 1940 ("Advisers Act"), 15 U.S.C. 80b-14.

5. This Court has personal jurisdiction over the Defendants, and venue is proper in the Southern District of Florida, because the Defendants' acts and transactions constituting violations of the Securities Act, the Exchange Act and the Advisers Act occurred in the Southern District of Florida. In addition, EPG's principal office is located in the Southern District of Florida, and Defendant Giordano resides in the Southern District of Florida.

6. Defendants, directly and indirectly, have made use of the means and instrumentalities of interstate commerce, the means and instruments of transportation and communication in interstate commerce, and the mails, in connection with the acts, practices, and courses of business set forth in this Complaint.

THE FRAUDULENT SCHEME

I. EPG's Unregistered Offering

7. Beginning in October 2002, the Defendants began offering potential investors limited partnership interests in EPG in exchange for a minimum investment of $25,000. Giordano solicited investors for EPG through a series of national newspaper advertisements, as well as through mailing EPG offering materials to potential investors who responded to the newspaper advertisements.

8. EPG and Giordano attempted to entice potential investors by falsely claiming, in sales literature and in conversations with prospective investors, that their investment principal was fully guaranteed by bond and bond equivalents held by a national bank for EPG, that the investment was "virtually risk-free", and that the investors could expect annual returns of between 25% to 70%. The EPG offering materials also falsely claimed that Giordano had over $100 million in assets under management. Moreover, at no time did the Defendants disclose Giordano's NASD disciplinary history to potential investors.

9. No registration statement has been filed or was in effect with the Commission in connection with the securities offered by EPG, nor is EPG entitled to any registration exemption.

II. Material Misrepresentations and Omissions in Connection with the Offer of EPG's Securities

10. In the process of soliciting investments, EPG and Giordano distributed sales literature and other documents containing false statements and omissions of material facts. In addition, EPG and Giordano orally made false statements and omissions of material fact. Included in the material misrepresentations and omissions are:

A. The Investments Were Not Insured or Risk-Free

11. EPG sales literature sent to potential investors stated that invested principal was guaranteed by bonds and bond equivalents held by a national bank and that the investment was virtually risk-free. In conversations with potential investors, Giordano also told them that their principal investment in EPG was insured and that there was little or no risk in making the investment in EPG.

12. These statements were false and misleading. EPG documents show that neither EPG nor Giordano held the bond and bond equivalents they claimed in EPG's sales literature. In reality, there was nothing protecting investors from losing their entire principal investment. Moreover, Giordano's investment strategy of investing in real estate, securities, and cash or cash equivalents, would not have been "virtually risk-free" had EPG undertaken it.

B. EPG Could Not Guarantee 25% to 70% Returns

13. EPG's sales literature distributed to potential investors also stated that EPG had annual investment returns of 25% to 70% since its inception. In addition, Giordano made this statement orally to potential EPG investors.

14. This statement is also patently false. EPG did not raise any funds. Even if EPG had raised funds, it would not have been economically feasible for EPG to provide 25% to 70%, short-term, risk-free returns in an open-ended offering.

C. Giordano Did Not Have $100 million Under Management

15. EPG's sales literature, which Giordano distributed to potential investors, falsely represented that Giordano had at least $100 million in assets under management. This representation is false and misleading because Giordano has never managed assets whose value remotely approached $100 million.

D. EPG and Giordano Failed to Tell Investors about Giordano's Disciplinary History

16. EPG and Giordano failed to disclose Giordano's NASD disciplinary history to potential EPG investors. Neither EPG nor Giordano told potential investors in EPG's sales literature nor in telephone conversations that Giordano had numerous NASD customer complaints lodged against him while he worked in the securities industry. The Defendants also did not disclose to potential investors that Giordano previously had been suspended by the NASD from association with any registered entity or firm, and ultimately was barred by the NASD from such association in June 2002.

17. Each of the foregoing misrepresentations and omissions concern statements of material fact, and have been made with the knowledge, or at the direction, of Giordano.

COUNT I
SALE OF UNREGISTERED SECURITIES IN VIOLATION OF SECTIONS 5(a) AND 5(c) OF THE SECURITIES ACT

(As Against Defendants EPG and Giordano)

18. The Commission repeats and realleges Paragraphs 1 through 17 of this Complaint as if fully set forth herein.

19. No registration statement was filed or in effect with the Commission pursuant to the Securities Act and no exemption from registration exists with respect to the securities and transactions described in this Complaint.

20. Beginning in October 2002, Defendants EPG and Giordano, directly and indirectly, have: (a) made use of the means or instruments of transportation or communication in interstate commerce or of the mails to sell securities, through the use or medium of a prospectus or otherwise; (b) carried securities or causing such securities to be carried through the mails or in interstate commerce, by any means or instruments of transportation, for the purpose of sale or delivery after sale; and/or (c) made use of the means or instruments of transportation or communication in interstate commerce or of the mails to offer to sell or offer to buy through the use or medium of any prospectus or otherwise, without a registration statement having been filed or being in effect with the Commission as to such securities.

21. By reason of the foregoing, Defendants EPG and Giordano, directly and indirectly, have violated, and unless enjoined will continue to violate, Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. 77e(a) and 77e(c).

COUNT II
FRAUD IN VIOLATION OF SECTION 17(a)(1) and 17(a)(3) OF THE SECURITIES ACT

(As Against Defendants EPG and Giordano)

22. The Commission repeats and realleges Paragraphs 1 through 17 of this Complaint as if fully set forth herein.

23. Beginning in October 2002, Defendants EPG and Giordano directly and indirectly, by use of the means or instruments of transportation or communication in interstate commerce and by use of the mails, in the offer of securities, have: (a) knowingly, willfully or recklessly employed devices, schemes or artifices to defraud; and/or (b) engaged in transactions, practices and courses of business which operated as a fraud or deceit upon purchasers and prospective purchasers of securities.

24. By reason of the foregoing, Defendants EPG and Giordano, directly and indirectly, have violated and, unless enjoined will continue to violate, Section 17(a)(1) and 17(a)(3) of the Securities Act, 15 U.S.C. 77q(a)(1) and 77q(a)(3).

COUNT III
FRAUD IN VIOLATION OF SECTIONS 206(1) AND 206(2) OF THE INVESTMENT ADVISERS ACT

(As Against Defendant Giordano)

25. The Commission repeats and realleges Paragraphs 1 through 17 of this Complaint as if fully set forth herein.

26. Beginning in October 2002, Defendant Giordano, by use of the mails, and the means and instrumentality of interstate commerce, directly or indirectly, has knowingly, willfully or recklessly: (i) employed devices, schemes or artifices to defraud his clients or prospective clients; and (ii) engaged in transactions, practices and courses of business which have operated as a fraud or deceit upon his clients or prospective clients.

27. By reason of the foregoing, Defendant Giordano, has violated, and unless enjoined will continue to violate, Sections 206(1) and 206(2) of the Advisers Act, 15 U.S.C. 80b-6(1) and 80b-6(2).

RELIEF REQUESTED

WHEREFORE, the Commission respectfully requests that the Court:

I. Declaratory Relief

Declare, determine and find that Defendants EPG and Giordano committed the violations of the federal securities laws alleged in this Complaint.

II. Permanent Injunctive Relief

Issue a Permanent Injunction, restraining and enjoining Defendant EPG, its officers, agents, servants, employees, and all persons in active concert or participation with it, and each of them, from violating: (a) Section 5(c) of the Securities Act, 15 U.S.C. 77e(c) and (b) Sections 17(a)(1) and 17(a)(3) of the Securities Act, 15 U.S.C. 77q(a)(1) and 77q(a)(3); and against Defendant Giordano, his officers, agents, servants, employees, and all persons in active concert or participation with him, and each of them, from violating: (a) Section 5(c) of the Securities Act, 15 U.S.C. 77e(c); (b) Sections 17(a)(1) and 17(a)(3) of the Securities Act, 15 U.S.C. 77q(a)(1) and 77q(a)(3); and (c) Sections 206(1) and 206(2) of the Advisers Act, 15 U.S.C. 80b-6(1) and 80b-6(2).

III. Penalties

Issue an Order directing Defendant Giordano to pay a civil monetary penalty pursuant to Section 20(d) of the Securities Act, 15 U.S.C. 77t(d), Section 21(d) of the Exchange Act, 15 U.S.C. 78(d)(3), and Section 209(e) of the Advisers Act, 15 U.S.C. 80b-9(e).

IV. Further Relief

Grant such other and further relief as may be necessary and appropriate.

V. Retention of Jurisdiction

Further, the Commission respectfully requests that the Court retain jurisdiction over this action in order to implement and carry out the terms of all orders and decrees that may hereby be entered, or to entertain any suitable application or motion by the Commission for additional relief within the jurisdiction of this Court.

February 10, 2004

Respectfully submitted,

By: \S\____________________
Teresa J. Verges
Assistant Regional Director
Florida Bar No. 0997651

Yolanda Gonzalez
Branch Chief
Florida Bar No. 107042

Donna K. Knapton
Senior Counsel
Florida Bar No. 0103373

Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
801 Brickell Avenue, Suite 1800
Miami, Florida 33131
Telephone: (305) 982-6300
Facsimile: (305) 536-4154


http://www.sec.gov/litigation/complaints/comp18577.htm


Modified: 02/17/2004