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U.S. Securities and Exchange Commission

SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17348 / January 30, 2002

SECURITIES AND EXCHANGE COMMISSION v. ENRIQUE E. PERUSQUIA, United States District Court for the Northern District of California, No. C 02-0540 CW

The Securities and Exchange Commission today announced that it has sued stockbroker Enrique E. Perusquia for a long-running fraud that resulted in client losses of at least $68 million. The complaint alleges that from January 1992 through March 1998, Perusquia secretly invested client funds in a series of speculative companies in return for broker kickback commissions from the companies, which later collapsed. In a separate matter, the United States Attorney's Office for the Northern District of California also announced today the filing of criminal charges against Perusquia for the same conduct that is alleged in the Commission's complaint.

The Commission's complaint alleges that Perusquia, formerly a Senior Vice President at PaineWebber and Lehman Brothers, defrauded a wealthy client of at least $68 million by funneling tens of millions of dollars of client funds into a group of speculative gold mining companies from which Perusquia was secretly receiving millions of dollars in kickback commissions and stock. According to the complaint, Perusquia forged client signatures on private placement memoranda, powers of attorney and other documents to carry out his fraud; misappropriated at least $1.6 million of client funds for personal use; and engaged in unauthorized margin trading during a six year period beginning in 1992 and ending in March 1998. To conceal his fraud, the complaint alleges that Perusquia prepared and sent phony account statements to his client that inflated the value of the client's investments, failed to disclose the value and extent of the gold mining investments, and listed other securities that the client did not own.

The complaint charges Perusquia with securities fraud and seeks to compel him to disgorge all his illegal profits plus prejudgment interest, and pay civil monetary penalties. The complaint also seeks an injunction prohibiting Perusquia from future violations of the antifraud provisions of the securities laws (Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933).


*  SEC Complaint in this matter.


http://www.sec.gov/litigation/litreleases/lr17348.htm

Modified: 01/31/2002