U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19451 / November 1, 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 20, 2005, United States District Court Judge William D. Quarles entered a Final Judgment For Disgorgement and Repatriation Against Relief Defendants Sean Jupiter and Derek Jupiter requiring that they disgorge any ill-gotten gains that they have received or in the future will receive from their father, defendant Dean J. Jupiter (Jupiter). Previously, Jupiter consented to entry of a permanent injunction and to pay over $30 million relating to his 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), No. 17956 (January 29, 2003), and No. 19436 (October 19, 2005).