SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17035 / June 13, 2001
SECURITIES AND EXCHANGE COMMISSION v. JORGE EDUARDO BALLESTEROS FRANCO, et al., Civil Action No. 01CV 3872 (JGK) (S.D.N.Y.) (filed May 8, 2001)
Former Lehman Brothers Investment Banking Analyst is Barred from the Securities Industry
On May 31, 2001, the U.S. District Court for the Southern District of New York entered a final judgment against Ricardo Ballesteros Gutierrez ("Ballesteros"), a former investment banking analyst at Lehman Brothers Inc., based upon charges of insider trading. In its complaint filed on May 8, 2001, the Commission alleged that Ballesteros purchased the stock of Nalco Chemical Company after being tipped by his father, Jose Luis Ballesteros Franco, then a director of Nalco, concerning the upcoming acquisition of Nalco by the French company, Suez Lyonnaise des Eaux. The Commission's complaint alleges that Ballesteros, his father, and other members of his immediate family made illegal profits of over $3.3 million.
Ballesteros consented to the entry of the final judgment, which permanently enjoins him from violating the antifraud provisions contained within Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 promulgated thereunder. The Court also ordered Ballesteros to pay a civil penalty of $20,853. The estate of Ballesteros' father, who died on May 28, 2000, has consented to pay over $3.7 million, representing disgorgement of all profits made by the Ballesteros family, including Ricardo Ballesteros' profits of $20,853, and prejudgment interest thereon.
Today, based on the entry of the Court's injunction, the Commission also instituted settled administrative proceedings against Ballesteros. Without admitting or denying the Commission's findings, Ballesteros consented to the entry of the Commission's Order, which bars him from associating with any broker, dealer, municipal securities dealer, investment adviser or member of a national securities exchange or registered securities association, with the right to reapply after five years. In the Matter of Ricardo Ballesteros Gutierrez, Administrative Proceeding File No. 3-10507; Securities Exchange Act of 1934 Release No. 44420 (June 13, 2001); Investment Advisers Act of 1940 Release No. 1948 (June 13, 2001). See also Litigation Release No. 16991 (May 8, 2001).http://www.sec.gov/litigation/litreleases/lr17035.htm