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Litigation Release No. 23475 / February 26, 2016

Securities and Exchange Commission v. Steven H. Davis, et. al, Civil Action No. 14-cv-01528 (VEC) (S.D.N.Y.)

SEC Obtains Judgment Against Francis Canellas

The Securities and Exchange Commission announced today that on February 24, 2016, the Honorable Valerie E. Caproni of the United States District Court for the Southern District of New York entered a judgment against defendant Francis Canellas. The judgment resolves all issues of liability against Canellas arising from the Commission's filing of a civil complaint against him on March 6, 2014. The judgment imposes on Canellas a permanent injunction against future violations of certain antifraud provisions of the federal securities laws.

In its Complaint, the Commission alleged that in 2008 and 2009, Canellas, the Finance Director of Dewey & LeBoeuf, LLP, an international law firm, in conjunction with other employees and officers of the firm, devised a scheme, and directed his staff, to materially falsify the firm's financial statements in order to meet certain covenants with its lenders. In 2010, Dewey & LeBoeuf conducted a $150 million private placement. Canellas defrauded investors by, among other things, assisting in drafting the firm's private placement memoranda which incorporated Dewey & LeBoeuf's fraudulent financial statements, for dissemination to investors.

Canellas consented to the entry of a judgment permanently enjoining him from violating 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. In addition, the judgment provides that the payment of disgorgement plus prejudgment interest, and the imposition of civil monetary penalties will be determined at a later date.

The SEC staff in the New York office responsible for the investigation and the ongoing litigation includes William Finkel, Joseph Ceglio, Christopher Mele, Michael Osnato, Howard Fischer, and Thomas P. Smith, Jr. The case has been supervised by Sanjay Wadhwa.

For further information, see Press Release 2014-45 (March 6, 2014) and Litigation Release No. 23443 (January 11, 2016).



Modified: 02/26/2016