Litigation Release No. 19525 / January 10, 2006
Securities and Exchange Commission v. Anthony F. Giordano, Civil Action No. 06-60033 (Graham, J.; O’Sullivan, M.J.) (S.D. Florida, filed January 9, 2006)
SEC Charges Securities Law Recidivist For Hedge Fund raud and Stock Manipulation
On January 9, 2006, the Securities and Exchange Commission filed civil fraud charges in the United States District Court for the Southern District of Florida against Anthony F. Giordano for his role in two fraudulent schemes. Giordano is a securities law recidivist living in Boca Raton, Florida.
According to the SEC’s Complaint, the first scheme victimized several investors, including two nonprofit organizations, who lost millions of dollars in a purported hedge fund, EPG Limited Partners, Ltd. Giordano is allegedly responsible for numerous material misrepresentations and omissions to EPG investors concerning the use of their funds and EPG’s purported assets and returns. Giordano is also alleged to have diverted substantial amounts of investor funds for undisclosed purposes, including approximately $1.5 million for personal use. The second scheme charged in the Complaint involved market manipulation of the common stock of Weida Communications, Inc., a publicly-traded company. Giordano is alleged to have manipulated the market price for Weida common stock to approximately $5 per share, in part to facilitate the sale of Weida stock in private transactions at approximately $3 per share. Hundreds of investors, many elderly and unsophisticated, allegedly paid millions of dollars for Weida common stock at these inflated prices. Giordano is alleged to have received approximately $1.5 million of investor funds from these transactions. The SEC suspended trading in Weida securities on April 25, 2005 (34 Act Rel. No. 51603).
Without admitting or denying the allegations of the Complaint, Giordano consented to a final judgment permanently enjoining him from violations of Sections 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, imposing permanent officer and director and penny stock bars, and directing that he pay disgorgement of $3.25 million but providing that payment of that amount is deemed satisfied upon entry of an order requiring Giordano to pay at least that much in restitution in a related criminal case, United States of America v. Anthony F. Giordano, et al., Case No. 05-80061-CR (S.D. Fla. Original Indictment Filed April 14, 2005). Giordano also pleaded guilty to related criminal charges.
The SEC acknowledges the assistance of the United States Attorney’s Office for the Southern District of Florida, Federal Bureau of Investigation and Florida Office of Financial Regulation. The SEC’s investigation is continuing.