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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21905 / March 28, 2011

Securities and Exchange Commission v. Jose O. Vianna, Jr. and Creswell Equities, Inc., Case No. 10 Civ. 1842 (GBD) (S.D.N.Y.)

FORMER BROKER SETTLES CHARGES ARISING FROM SCHEME TO DEFRAUD INSTITUTIONAL CUSTOMER

The Securities and Exchange Commission today announced that on March 25, 2011, the Honorable George B. Daniels of the United States District Court for the Southern District of New York entered a final judgment on consent against Defendant Jose O. Vianna, Jr., a former registered representative of Maxim Group LLC, a registered broker-dealer. The judgment (i) permanently enjoined Vianna from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and from violating, or aiding and abetting violations of, Section 17(a) of the Exchange Act, and Rule 17a-3, thereunder; (ii) ordered Vianna to disgorge $306,412 in ill-gotten gains plus $47,442 in prejudgment interest thereon; and (iii) ordered Vianna to pay a $130,000 civil penalty.

The SEC’s complaint, filed on March 9, 2010, alleged that between July 2007 and March 2008, Vianna, while a registered representative at Maxim Group LLC, diverted profitable trades from the account of a large Spanish bank, referred to in the complaint as Customer A, to the account of Relief Defendant Creswell Equities, Inc., a British Virgin Islands company. The complaint alleged that Vianna simultaneously entered orders in the accounts of Customer A and Creswell to trade the same amounts of the same stock. Each time, he placed a buy order in one customer’s account and a sell order in the other customer’s account. When the market moved to make Customer A’s trade profitable and Creswell’s trade unprofitable, Vianna improperly misused his access to Maxim’s order management system to divert Customer A’s profitable trade to Creswell by changing Maxim’s records to switch the identity of buyer and seller to the trade.

Creswell previously agreed to settle the SEC’s claim against it by consenting to the entry of a judgment ordering Creswell to pay $1,661,650.18 in disgorgement.

See also Litigation Releases No. 21446 (March 10, 2010) and 21704 (October 21, 2010).

 

http://www.sec.gov/litigation/litreleases/2011/lr21905.htm


Modified: 03/28/2011