U.S. SECURITIES & EXCHANGE COMMISSION
Litigation Release No. 18311 / August 27, 2003
SEC ALLEGES FRAUD AGAINST UNREGISTERED INVESTMENT ADVISER
SECURITIES AND EXCHANGE COMMISSION V. LUIS GIRO, Case No. 03-21654 CIV-GOLD (S.D. Fla.)
The Securities and Exchange Commission (SEC) announced that on June 18, 2003, it filed a complaint against an unregistered investment adviser, Luis Giro who operated his company, Giro Investments Group, Inc., in Miami Springs, Florida. The SEC's complaint alleges that the defendant misappropriated over $2,370,000 from at least twenty advisory clients and investors who were relatives, neighbors and long time family friends.
According to the SEC's complaint, from at least March 1997 to October 2001, Giro misappropriated over $2,370,000 from at least twenty advisory clients and investors by committing two frauds. The SEC alleges that Giro told his advisory clients that through Giro Investments, he would manage and invest their funds in the stock market without any risk to their principal. The SEC also alleges that Giro offered and sold a venture capital investment in Giro Investments to at least five investors and that he promised each victim a specific fixed rate of return that varied from victim to victim between 15% and 30%. The SEC's complaint further alleges that contrary to those representations and others, Giro used the investors' and his clients' money to operate a Ponzi scheme, trade in an online brokerage account, finance his family and pay his business and personal expenses. In addition, the SEC alleges that Giro continued his fraudulent scheme until October 2001, when Giro vacated his apartment after telling at least two victims that he had lost everything.
The SEC's complaint charges the defendant with violating Section 17(a) of the Securities Act of 1933, 15 U.S.C. § 77q, Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. 240.10b-5, promulgated there-under; and Sections 206(1) and (2) of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-6. Those sections and rules prohibit fraud in the offer and sale, and in connection with the purchase and sale, of securities. In addition, the SEC seeks a court order against the defendant for an accounting, disgorgement and civil penalties.
The SEC appreciates the assistance the Miami-Dade Police Department provided to its staff.