United States Securities and Exchange Commission
Litigation Release No. 18478 / November 24, 2003
Securities and Exchange Commission v. Anthony Dong-Yin Shen, Srinivas Anumolu, Ronald W. Pinto, Deborah J. Breckenridge, and Dominick J. Savino, 01 Civ. 2438 (GBD) (S.D.N.Y.)
SEC Settles Fraud Charges Against Two Former Insurance Company Employees
The Securities and Exchange Commission announced today that on November 19, 2003, the United States District Court for the Southern District of New York entered final judgments against Anthony Dong-Yin Shen and Srinivas Anumolu, former employees of New York Life Insurance Company, Inc. ("New York Life"). The Commission had charged Shen and Anumolu with defrauding New York Life by accepting commission kickbacks and gratuities from registered representatives at several broker-dealers in exchange for directing securities trades on behalf of New York Life to those broker-dealers, sometimes at prices favorable to the broker-dealers and disadvantageous to New York Life. The judgments permanently restrain and enjoin Shen and Anumolu from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which are general antifraud provisions of the federal securities laws. The judgment against Shen orders him to pay $278,000 in disgorgement, of which $40,000 is deemed satisfied by his payment of restitution in a parallel criminal conviction, and the remainder is waived based on his sworn financial representations. The judgment against Anumolu orders him to pay $205,500 in disgorgement, which is deemed satisfied by his prior settlement payment to New York Life in excess of that amount.
Shen and Anumolu had pleaded guilty to criminal charges arising from their fraud. The criminal court considered Shen's substantial cooperation during the investigation, and on April 10, 2003, ordered him to pay criminal restitution in the amount of $136,394 jointly and severally with another defendant, serve three years of probation, and perform community service. On January 8, 2003, the court sentenced Anumolu to serve two years of imprisonment and waived restitution in view of Anumolu's settlement payment to New York Life.
The Commission also had charged that three registered representatives at three broker-dealers gave kickbacks or gratuities to Shen, Anumolu, or both of them, in order to obtain a flow of New York Life securities trades and favorable prices. The SEC's civil action against those three registered representatives continues. Two of the three were charged also with criminal securities fraud by the United States Attorney's Office for the Southern District of New York. They pleaded guilty and are now serving terms of imprisonment.
[Litigation Release No. 16937, March 22, 2001]