U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18556 / January 28, 2004
Securities and Exchange Commission v. Anthony Dong-Yin Shen, Srinivas Anumolu, Ronald W. Pinto, Deborah J. Breckenridge, and Dominick J. Savino, 01 Civ. 2438 (GBD) (S.D.N.Y.)
Former Registered Representative to Pay $500,000 Fine to Settle Fraud Action Arising From Kickback Scheme
The Securities and Exchange Commission announced today that on January 21, 2004, the United States District Court for the Southern District of New York entered final judgment against Ronald W. Pinto, former registered representative with Nomura Securities International, Inc. The Commission had charged Pinto with defrauding New York Life Insurance Company, Inc. ("New York Life") by giving commission kickbacks and gratuities to two former New York Life employees. In exchange, the two former employees directed securities trades on behalf of New York Life to Pinto, sometimes at prices favorable to Nomura and disadvantageous to New York Life. Pinto consented to the final judgment without admitting or denying the allegations in the Commission's complaint. The judgment permanently restrains and enjoins Pinto from violating antifraud provisions of the federal securities, 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. The judgment orders Pinto to pay $1,800,000 in disgorgement, which is deemed satisfied by his earlier payment of that amount to New York Life in a private settlement. The judgment also orders Pinto to pay a $500,000 civil penalty.
Today, the Commission also instituted and settled administrative proceedings against Pinto. Pinto consented to an order, based on the entry of final judgment against him in the Commission's civil enforcement action and on his prior criminal conviction, that bars him from association with any broker-dealer.
Pinto had pleaded guilty to criminal charges of securities fraud arising from the same scheme. In November 2002, the criminal court sentenced him to serve twenty-one months in prison. The criminal court did not order restitution in view of Pinto's $1,800,000 settlement payment to New York Life.
With this settlement, the Commission's has concluded this action against three of the five original defendants. The two former New York Life employees who had received kickbacks and gratuities settled the Commissions claims against them in November 2003. Both also pleaded guilty to criminal securities fraud charges and are serving their sentences. The Commission also charged that two other registered representatives, at different broker-dealers, gave kickbacks or gratuities to one or both of the former New York Life employees in exchange of a flow of New York Life securities trades and favorable prices. The Commission's civil action against those two registered representatives continues. One has pleaded guilty to criminal charges and is serving her sentence. The other was not criminally charged.