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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22997 / May 21, 2014

Securities and Exchange Commission v. Gaeton S. Della Penna et al., Civil Action No. 8:14-CV-1203T30MAP

The Securities and Exchange Commission today filed charges against Gaeton “Guy” S. Della Penna of Sarasota, Florida for engaging in a scheme to defraud investors who purchased securities in his private investment funds.

According to the complaint the SEC filed in the U.S. District Court for the Middle District of Florida, from 2008 until 2013, Della Penna defrauded investors in three private investment funds he operated. Della Penna raised approximately $3.8 million from investors, who were told their funds would be used to trade securities or invest in small companies. The SEC’s complaint alleges Della Penna lost nearly all of the investors’ money through a combination of unsuccessful investments, operating a Ponzi scheme, and diverting a large sum to himself. Della Penna misappropriated investor funds totaling about $1.1 million to pay personal expenses, including mortgage payments on his 10,000 square foot home and payments to his girlfriend. To cover up his fraud, Della Penna operated a Ponzi-like scheme by using later investors’ money to pay fake “returns” to prior investors. He also provided false account statements and other documents to some investors. Gaeton Capital Advisors, LLC, an entity to which Della Penna transferred some of the investor funds, is named as a relief defendant.

The SEC’s complaint alleges Della Penna violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8(a) thereunder. The SEC is seeking financial penalties, disgorgement of ill-gotten gains plus prejudgment interest, and a permanent injunction against Della Penna. The SEC seeks disgorgement of ill-gotten gains from relief defendant Gaeton Capital Advisors, LLC.

Also, the U.S. Attorney’s Office for the Middle District of Florida today announced related criminal charges against Della Penna. The SEC acknowledges the substantial assistance of that office and the Tampa Division of the U.S. Secret Service in this investigation.

SEC Complaint

 

http://www.sec.gov/litigation/litreleases/2014/lr22997.htm


Modified: 05/21/2014