U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19451 / November 1, 2005
Securities and Exchange Commission v. William F. Mahon and Dean J. Jupiter et. al., Civil Action No. S-00-2918 (D. MD.)
The Securities and Exchange Commission (Commission) announced today that on October 20, 2005, United States District Court Judge William D. Quarles entered a Final Judgment For Disgorgement and Repatriation Against Relief Defendants Sean Jupiter and Derek Jupiter requiring that they disgorge any ill-gotten gains that they have received or in the future will receive from their father, defendant Dean J. Jupiter (Jupiter). Previously, Jupiter consented to entry of a permanent injunction and to pay over $30 million relating to his role in a scheme to defraud Alexander & Alexander Services Inc. (Alexander), a Maryland based insurance brokerage firm, which was acquired by Aon Corporation in 1997. The Commission's complaint alleged: (1) from 1992 through April 1997, Alexander's portfolio manager, William F. Mahon, secretly traded millions of dollars in high-risk derivatives and concealed $62 million in losses and $35 million in gains resulting from such trading on Alexander's books and records; (2) Jupiter, a former registered representative of a brokerage firm, sold Mahon several of these derivatives and received sales commissions of at least $14.3 million; (3) from 1993 to 1995, Jupiter paid Mahon at least $190,000 in kickbacks to induce him to continue investing in the high-risk derivatives; (4) at the inception of the scheme, Jupiter discussed with Mahon how to conceal from Alexander losses from his trading in the high-risk derivatives; and (5) Jupiter never disclosed to Alexander his knowledge of the scheme or his kickback payments to Mahon.