U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17582 / June 24, 2002
UNITED STATES SECURITIES AND EXCHANGE COMMISSION v. SEBASTIAN CORRIERE et al., U.S. District Court for the Middle District of Florida (Tampa Division), Civil Action No. 8:02-CV-666-T17EAJ (M.D. Fla April 18, 2002)
SEBASTIAN CORRIERE PRELIMINARILY ENJOINED FROM SOLICITING INVESTORS FOR FICTITIOUS TRADING PROGRAMS
On June 18, 2002, the Honorable Elizabeth A. Kovachevich of the United States District Court for the Middle District of Florida entered a preliminary injunction order (Order) against Sebastian Corriere (Corriere), based upon his sales of approximately $3 million in fraudulent prime bank securities. The Order found that the Commission was reasonably likely to prevail on the merits of the allegations in its complaint that Corriere had engaged in fraud and registration violations of the securities laws. The Order also froze Corriere's assets, as well as those of two relief defendants, Quantum Equities, Inc. and The Kings Fellowship, Inc., which the Commission alleged are controlled by Corriere and received proceeds from the fraud.
The Court had previously issued a temporary restraining order (TRO) on April 18, 2002, based on a complaint filed by the Commission. The Commission has alleged that Corriere, a resident of Clearwater, Florida, raised almost $3 million from investors located across the country. The complaint alleged that Corriere offered participation interests in fictitious prime bank trading programs involving medium term notes or MTNs. Corriere allegedly promised investors a return of 100 percent per week, guaranteed investors that they could not lose their initial investment, and told investors that these trading programs were risk-free and safe. According to the Commission's complaint, these trading programs do not exist, investors never received the returns promised, and most investors lost their initial investment. In addition, the complaint alleged that Corriere diverted some investor funds for personal use. The complaint alleged that, by this conduct, Corriere violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The action is ongoing.
This case is part of the Commission's continuing effort to combat prime bank fraud and to alert the public to the risks posed by these phony investments. The risk of this type of fraud and warnings about how to avoid it are spelled out in the Interagency Advisory: Warning Concerning "Prime Bank" Notes, Guarantees, and Letters of Credit and Similar Financial Instruments (October 21, 1993), which is discussed on the Commission's Homepage at http://www.sec.gov/divisions/enforce/primebank.shtml. The Commission wishes to thank the Portland, Oregon Field Office of the Federal Bureau of Investigation for its assistance in this matter.