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U.S. Securities and Exchange Commission

U.S. Securities & Exchange Commission

Litigation Release No. 17956 / January 29, 2003.


SEC v. William F. Mahon and Dean J. Jupiter, Civil Action No. S-00-2918 (D. MD).

The U.S. Securities and Exchange Commission (Commission) announced today that on January 17, the Honorable Frederic N. Smalkin, U.S. District Judge for the District of Maryland, entered an Order of Permanent Injunction against Dean J. Jupiter, a resident of Jupiter, Florida. The order prohibits Jupiter from engaging in fraud in violation of Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 promulgated thereunder. The order also requires Jupiter to pay disgorgement of all ill-gotten gains in an amount to be determined later. Jupiter consented to the order without admitting or denying the allegations in the Commission's complaint.

The Commission sued Jupiter on September 28, 2000, for his alleged role in a scheme to defraud Alexander & Alexander Services Inc. (Alexander), a Maryland based insurance brokerage firm, which was acquired by Aon Corp. 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.

Previously, Mahon consented, without admitting or denying the allegations in the complaint, to an order permanently enjoined him from violating Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5 and 13b2-1 thereunder. He also paid disgorgement of $190,000, prejudgment interest of $114,862.08 and a civil penalty of $50,000.

For further information, see Litigation Release No. 16751 (October 4, 2000).



Modified: 01/30/2003