U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20785 / October 20, 2008

Securities and Exchange Commission v. Spiro Germenis, et al., 06-CIV 6153 (LDW) (E.D.N.Y.)

Court Enters Amended Final Judgment by Default Against Spiro Germenis, Oracle Services Inc., Oracle Evolution, LLC, Oracle E Fund, LP, Oracle J Fund, LP, and Oracle Evolution Capital, LLC

The Securities and Exchange Commission announced today that on October 3, 2008, the United States District Court for the Eastern District of New York entered an amended final judgment by default against defendants Spiro Germenis, Oracle Services Inc., and Oracle Evolution, LLC, and relief defendants Oracle E Fund, LP, Oracle J Fund, LP, and Oracle Evolution Capital, LLC. The Commission alleged in its complaint, filed on November 16, 2006, that Germenis and two entities through which he operated, Oracle Services Inc. and Oracle Evolution, LLC, diverted investors' funds for Germenis's own use, and that Germenis then fled New York. The Commission further alleged that Germenis solicited investments in certain funds he was sponsoring, but instead of depositing the investments into the funds' brokerage accounts, Germenis diverted the investors' funds to his own use. The complaint also alleged that Germenis provided investment management and advisory services for individual clients, but abused those clients' trust by taking money from their accounts for his own use. Finally, the Commission alleged that Germenis created phony or altered account statements that he provided investors to conceal his misuse of the money entrusted to him.

On November 17, 2006, the Court issued an order that, among other things, temporarily restrained the defendants from violating certain antifraud provisions of the federal securities laws and directed that the assets of defendants and relief defendants, as well as any assets held by or under the control of the defendants or relief defendants, be frozen. On December 27, 2006, the Court entered a preliminary injunction which extended the temporary restraining order and asset freeze.

In the amended final default judgment, the Court permanently enjoins defendants Germenis and Oracle Evolution, LLC, from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as Sections 206(1) and (2) of the Investment Advisers Act of 1940, and permanently enjoins Oracle Services Inc. from future violations of Sections 206(1) and (2) of the Investment Advisers Act of 1940. The Court also orders defendants and relief defendants to pay $7,705,249.83, representing undisgorged profits of $6,500,000 gained as a result of the conduct alleged in the complaint, with prejudgment interest of $1,205,249.83; and orders Germenis and Oracle Evolution, LLC, each to pay a civil penalty of $480,000, and Oracle Services Inc. to pay a civil penalty of $240,000.

For further information, see Litigation Release No. 19920 (November 21, 2006).