UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17368 / February 20, 2002
SEC SUES MIAMI STOCKBROKER ALLEGING MISAPPROPRIATION OF $3.2 MILLION IN CUSTOMER FUNDS
Securities and Exchange Commission v. R. Christopher Hanna, Civil Action No. 02-20531-CIV-GOLD (S.D. Fl., filed February 20, 2002)
On February 20, 2002, the Securities and Exchange Commission ("Commission") filed a civil action against R. Christopher Hanna, a former registered representative of Donaldson, Lufkin & Jenrette ("DLJ"), an affiliate of Credit Suisse First Boston, accusing him of misappropriating $3.2 million from his customers. The Commission's Complaint, which alleges that Hanna made unauthorized securities transactions in customer accounts, also charges Hanna with violations of the antifraud provisions of the federal securities laws.
The Complaint alleges that, from approximately 1997 to 2000, Hanna misappropriated more than $3.2 million from at least nine customer accounts at DLJ's Miami, Florida branch office using a scheme involving, among other things, fabricated account statements, fraudulent letters of authorization, and other material misrepresentations and omissions. According to the Complaint, Hanna transferred the misappropriated funds to bank and brokerage accounts in Chile that Hanna controlled. In addition, the Complaint alleges that Hanna made countless unauthorized securities transactions in numerous customer accounts.
According to the Complaint, Hanna sought to conceal his theft and other actions from his customers by diverting their actual account statements to post office boxes or locations that Hanna controlled. Hanna then created and sent to the customers fictitious account statements that contained false information about each customer's holdings, trading activity and account value.
The Complaint, which was filed in the U.S. District Court for the Southern District of Florida, seeks to permanently enjoin Hanna 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. In addition, the Complaint seeks disgorgement of all funds that were misappropriated by Hanna and civil penalties.