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U.S. Securities and Exchange Commission


Litigation Release No. 19671 / April 26, 2006

SEC v. Dominick Savino, et al., 01 CV 2438 (GBD) (S.D.N.Y.)

Court Orders Permanent Injunction, Disgorgement, and Civil Penalty Against Dominick Savino in Fraudulent Payments Scheme

On April 10, 2006, following a bench trial before the Honorable George B. Daniels, United States District Court Judge for the Southern District of New York, securities trader Dominick Savino ("Savino") was found liable for violating the antifraud provisions of the federal securities laws, and was permanently enjoined from future violations. Savino, who is a registered representative of a Connecticut broker-dealer, was enjoined from violating Section 17(a) of the Securities Act of 1933 and from violating and aiding and abetting violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Final Judgment also orders Savino to pay a total of $669,628, consisting of $569,628 in disgorgement and pre-judgment interest, and a $100,000 third-tier civil money penalty based on his fraudulent conduct.

The Commission's complaint against Savino and four other individuals, which was filed on March 22, 2001, arose out of a fraudulent scheme involving two former employees at New York Life Insurance Company, Inc., who directed a flow of securities trades for the insurance company's proprietary accounts, often at prices unfavorable to New York Life, to certain salespersons in return for cash kickbacks and other improper gifts and gratuities made by the salespersons and others.

The District Court's Modified Final Judgment was entered following the court's findings in a Memorandum Decision issued on February 16, 2004. In that decision, Judge Daniels found that Savino violated his duties as a licensed securities professional by engaging in an "illegal fraudulent scheme" with Anthony Shen ("Shen"), a New York Life bond trader, to defraud New York Life that involved "material misrepresentations and omissions" in connection with his trades. Among other things, the District Court found that:

  • Savino offered and gave Shen "secret payments, gifts, and gratuities" in connection with their securities trades, that Savino concealed the fact that he was compensating Shen in connection with trades, and "affirmatively misrepresented" the nature of the consideration paid;

  • Savino "knowingly and willingly" defrauded New York Life, and intentionally failed to disclose, and intentionally concealed, the material circumstances of his trading relationship with Shen;

  • Savino's violations were "egregious," and were repeated "multiple times" over the course of his relationship with Shen; and

  • Savino attempted to conceal his conduct and also "attempted to obstruct" the investigation into his conduct by, among other things, lying to his employers' attorneys during their internal probe, and urging Shen to lie to conceal the scheme, and by providing "untruthful statements" during his deposition and while testifying at trial.

The Commission has instituted public administrative proceedings against Savino in order to determine what remedial action, if any, is appropriate in the public interest in light of the permanent injunction that was entered against him by the district court. [See Administrative Release No. 34-53492 (March 16, 2006)].

This judgment concludes the Commission's civil action against all five of the original defendants named in the complaint, who have all been enjoined. [See also Litigation Release No. 16937 (March 22, 2001); Litigation Release No. 18478 (November 24, 2003); Litigation Release No. 18556 (January 28, 2004); and 18667 (April 13, 2004)].



Modified: 04/26/2006