U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19436 / October 19, 2005

Securities and Exchange Commission v. William F. Mahon and Dean J. Jupiter et. al., Civil Action No. S-00-2918 (D. MD.)

The Securities and Exchange Commission (Commission) announced today that on October 3, 2005, United States District Court Judge William D. Quarles entered a Final Judgment Setting Disgorgement, Imposing a Civil Penalty and Prejudgment Interest and a Repatriation Order against Dean J. Jupiter. Jupiter consented to pay $14,221,185 in disgorgement, $15,846,389 in prejudgment interest and a $110,000 civil penalty. Previously, Jupiter consented, without admitting or denying the allegations in the Commission's complaint, to entry of an Order that prohibits him from engaging in fraud in violation of Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder.

On October 3, 2005, Judge Quarles also entered a Final Judgment for Disgorgement and Repatriation Against Relief Defendants Lee Jupiter, Barbara Jupiter, Jillian Coen and Robert Coen (Jupiter's son, wife, and step-children, respectively), requiring, among other things, that they disgorge any ill-gotten gains that they have received or in the future will receive from Jupiter.

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 Corporation. 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.

For more information, see Litigation Release No. 16751 (October 4, 2000) and No. 17956 (January 29, 2003).