U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19797 / August 9, 2006
SEC v. Chance M. Vought and John M. Lucarelli, United States District Court for the District of Connecticut, 3:05-cr-268-JBA
Third Defendant Pleads Guilty, Fourth Found Guilty After Trial by Jury in Scheme to Obtain Stock in NewAlliance Bancshares IPO
The Commission announced that on July 28, 2006, in a case prosecuted by the United States Attorney for the District of Connecticut, a jury in New Haven, Connecticut returned a guilty verdict against John M. Lucarelli, age 34, of Greenwich, Connecticut, on one count of conspiracy and one count of securities fraud in connection with the NewAlliance Bancshares, Inc. initial public offering (IPO). The Commission also announced that, on June 29, 2006, just prior to the start of the criminal trial, Lucarelli's co-defendant, Chance M. Vought, age 56, of Quogue, New York, pled guilty to one count of securities fraud. Robert Ross and George Kundrat had previously pled guilty to related charges.
The indictment in this matter charged Vought and Lucarelli with conspiring to illegally obtain shares of NewAlliance stock. As alleged in the indictment, Vought, Lucarelli, and their co-conspirators were not eligible to obtain NewAlliance NAB stock at its $10 IPO price because they were not eligible account holders of New Haven Savings Bank (the predecessor of NewAlliance). However, Vought and Lucarelli are alleged to have participated in a scheme to purchase the stock at that $10 price by having individuals who were account holders purchase the stock for them. The Indictment alleges that, after purchasing the shares in the names of other people, the members of the conspiracy then sold the shares at a profit, which was shared among the defendants and the other members of their conspiracy.
On June 28, 2005, the Commission filed a complaint in the United States District Court for the District of Connecticut against Vought, Lucarelli, and others based upon the same fraudulent scheme that was the subject of the current indictment. The Commission's action remains pending.
For further information, please see Litigation Release No. 19288 (June 28, 2005), and the Investor Alert the Commission issued on June 28, 2005. The Investor Alert is available at: www.sec.gov/investor/pubs/mutualconversion.htm.