Litigation Release No. 21136 / July 16, 2009

Accounting and Auditing Enforcement Release No. 3011 / July 16, 2009

Securities and Exchange Commission v. Mark T. Turkcan, 4:09-cv-00204 (CEJ) (E.D. Mo., filed Feb. 4, 2009)


The Securities and Exchange Commission ("Commission") announced today that it obtained an order of permanent injunction ("Order") against Mark T. Turkcan, a former officer of First Banks, Inc., in the Commission's action against Turkcan in the United States District Court for the Eastern District of Missouri. Turkcan consented to the entry of the Order, which permanently enjoins him from, among other things, violating, or aiding and abetting violations of, the antifraud, periodic reporting, books and records, internal controls, and lying to auditors provisions of the federal securities laws and permanently bars him from serving as an officer or director of a public company.

The Commission's complaint alleges that from at least 1990 through April 2008, Turkcan, a resident of Kirkwood, Missouri, carried out his scheme by secretly obtaining money from third-party brokerage firms through the surreptitious use of repurchase transactions, which are essentially collateralized loans, and improperly disguising the money obtained from those transactions as gains from trading mortgage-backed securities. According to the complaint, Turkcan circumvented First Banks' internal controls and concealed his scheme by lying to his staff and his superiors, falsifying and fabricating documents, and providing false and misleading information to First Banks and its outside auditor.

Without admitting or denying the allegations in the complaint, Turkcan consented to entry of the Order that permanently enjoins him from violating Section 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rules 10b-5, 13b2-1, and 13b2-2 promulgated thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 promulgated thereunder. The Order also bars Turkcan, pursuant to Section 20(e) of the Securities Act and Section 21(d)(2) of the Exchange Act, from serving as an officer or director of a public company.

Previously, the honorable Judge Donald J. Stohr in United States v. Mark Turkcan, 4:08CR428 (DJS) (E.D. Mo.), in connection with the scheme alleged in the Commission's action, sentenced Turkcan to a prison term of one year and one day and ordered him to pay restitution of nearly $25 million in connection with his pleading guilty to one felony count of misapplication of bank funds. The criminal case was prosecuted by the United States Attorney's Office for the Eastern District of Missouri.

For further information about the Commission's action in Securities and Exchange Commission v. Mark T. Turkcan, see Litigation Release No. 20882 (Feb. 4, 2009).