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U.S. Securities and Exchange Commission

Litigation Release No. 18709 / May 13, 2004

SEC ANNOUNCES DEFAULT FINAL JUDGMENT AGAINST UNREGISTERED INVESTMENT ADVISER

SECURITIES AND EXCHANGE COMMISSION V. LUIS GIRO, Case No. 03-21654 CIV-Gold (S.D. Fla.)

The Securities and Exchange Commission (SEC) announced that on April 29, 2004, the Honorable Judge Alan Gold entered a default final judgment against an unregistered investment adviser, Luis Giro, who operated his company, Giro Investments Group, Inc., in Miami Springs, Florida. The default final judgment enjoins Giro from violating Section 17(a) of the Securities Act of 1933, 15 U.S.C. 77q, Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. 78j(b) and Rule 10b-5, 17 C.F.R. 240.10b-5, promulgated thereunder; and Sections 206(1) and (2) of the Investment Advisers Act of 1940, 15 U.S.C. 80b-6. The default final judgment also ordered Giro to disgorge $2,026,670.63 and assessed a civil money penalty of $120,000.

According to the SEC's complaint, from at least March 1997 to October 2001, Giro misappropriated over $2,370,000 from at least twenty advisory clients and investors by committing two frauds. The SEC alleged that Giro told his advisory clients that through Giro Investments, he would manage and invest their funds in the stock market without any risk to their principal. The SEC also alleged that Giro offered and sold a venture capital investment in Giro Investments to at least five investors and that he promised each victim a specific fixed rate of return that varied from victim to victim between 15% and 30%. The SEC's complaint further alleged that contrary to those representations and others, Giro used the investors' and his clients' money to operate a Ponzi scheme, trade in an online brokerage account, finance his family and pay his business and personal expenses. The SEC alleged that Giro continued his fraudulent scheme until October 2001, when Giro vacated his apartment after telling at least two victims that he had lost everything.

 

http://www.sec.gov/litigation/litreleases/lr18709.htm


Modified: 05/13/2004