U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19041 / January 21, 2005
SEC v. Susana P. Longo, Case No. 1:05-CV-0164 (N.D. Ga.)
SECURITIES AND EXCHANGE COMMISSION SUES FORMER VICE PRESIDENT OF ATLANTA, GEORGIA INVESTMENT ADVISER FOR MISAPPROPRIATING OVER $5.4 MILLION OF CLIENT FUNDS
On January 20, the Commission filed a complaint in the U.S. District Court for the Northern District of Georgia against Susana P. Longo, a former vice president in charge of compliance at Applied Financial Group, Inc. Applied Financial Group is an Atlanta-based investment adviser. The complaint alleges that from early 2000 through early 2004, Ms. Longo misappropriated at least $5.4 million from the accounts of four profit-sharing plans that were advisory clients of Applied Financial Group. The complaint alleges that, as part of that scheme, Ms. Longo placed unauthorized orders to sell securities in these accounts and forged documents that transferred the proceeds from those sales to the accounts of two elderly women who were also advisory clients of her employer. Longo then forged the signatures of these women on checks made that Longo made payable to herself, her creditors, and her relatives.
The Commission's complaint alleges that Ms. Longo's conduct violated the antifraud provisions of the federal securities laws, 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 aided and abetted violations of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The complaint seeks an injunction, disgorgement of ill-gotten gains plus prejudgment interest thereon, and civil penalties.
The SEC acknowledges the assistance and cooperation of the U.S. Attorney's Office for the Northern District of Georgia, which also announced today that it had filed criminal charges against Ms. Longo based upon the same conduct, the Employee Benefits Security Administration of the U.S. Department of Labor, and the Federal Bureau of Investigation.