UNITED STATES OF AMERICA
In the Matter of
HUGO SALVADOR VILLA MANZO,
|ORDER INSTITUTING PUBLIC ADMINISTRATIVE PROCEEDINGS PURSUANT TO SECTION 15(b)(6) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 203(f) OF THE INVESTMENT ADVISERS ACT OF 1940, MAKING FINDINGS AND IMPOSING SANCTIONS|
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that administrative proceedings be instituted pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act against Hugo Salvador Villa Manzo ("Villa").
In anticipation of these proceedings, Villa has submitted an Offer of Settlement ("Offer") to the Commission, which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or in which the Commission is a party, and without admitting or denying the findings herein, except that Villa admits the jurisdiction of the Commission over him and over the subject matter of these proceedings and the entry of the Judgment of Permanent Injunction and Other Relief as to Defendant Hugo Salvador Villa Manzo and Multinvestments, Inc., as set forth in Section III.E, Villa consents to the entry of this Order Instituting Public Administrative Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings and Imposing Sanctions ("Order") and to the entry of the findings and sanctions set forth below.
Accordingly, IT IS HEREBY ORDERED that the said administrative proceedings against Villa be, and hereby are, instituted.
The Commission makes the following findings:
A. Since November 1992, Villa has been associated with Multinvestments, Inc., a broker/dealer registered with the Commission.
B. Since August 20, 1999, Villa has been associated with Multinvestment Advisors, Inc., an investment adviser registered with the Commission.
C. On March 6, 2002, the Commission filed a Complaint in the United States District Court for the Southern District of New York, in an action captioned Securities and Exchange Commission v. Hugo Salvador Villa Manzo and Multinvestments, Inc., 02 Civ. 1766 (S.D.N.Y.), alleging, among other things, that Villa engaged in insider trading in violation of Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder in connection with transactions in the securities of Nalco Chemical Company ("Nalco").
D. The Commission's Complaint specifically alleged that Villa directed the June 24, 1999 purchase by Multinvestments, Inc., through its proprietary account, of 50,000 Nalco shares. The Complaint further alleged that Villa directed the purchase of Nalco securities while in possession of material, nonpublic information concerning a proposed tender offer for Nalco that was then being considered by Suez Lyonnaise des Eaux ("Suez"). Villa knew or had reason to know that this information was nonpublic and knew or had reason to know that it was obtained, directly or indirectly, from Jose Luis Ballesteros Franco, who was then a member of Nalco's Board of Directors. On June 28, 1999, Nalco and Suez jointly announced that a Suez subsidiary would make a tender offer within five business days for all outstanding Nalco common stock at a price of $53.00 per share. On June 28 and June 29, 1999, the 50,000 Nalco shares were sold, and illegal profits of $558,750 were realized.
E. On March 11, 2002, the Judgment of Permanent Injunction and Other Relief as to Defendant Hugo Salvador Villa Manzo and Multinvestments, Inc. ("Final Judgment") was entered by the United States District Court for the Southern District of New York. Among other things, the Final Judgment permanently enjoins Villa from violating Sections 10(b) and 14(e) of the Exchange Act and Rules 10b-5 and 14e-3 thereunder. The Final Judgment also orders Villa and Multinvestments, Inc. to disgorge profits of $558,750, plus prejudgment interest thereon in the amount of $106,596.83, and pay a civil money penalty in the amount of $838,125.
Based on the foregoing, the Commission deems it appropriate and in the public interest to impose the following sanction specified in Villa's Offer.
ACCORDINGLY, IT IS ORDERED that Villa be, and hereby is, barred from association with any broker, dealer or investment adviser.
By the Commission.
Jonathan G. Katz
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