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SEC Charges Los Angeles-Based "Finder" in Kickback Scheme Involving N.Y. Pension Fund


Washington, D.C., May 12, 2009 — The Securities and Exchange Commission today charged Julio Ramirez, Jr., who was formerly affiliated with Los Angeles-based broker-dealers DAV/Wetherly Financial L.P. and Park Hill Group LLC, in connection with a multi-million dollar kickback scheme involving New York's largest pension fund.

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In an amended complaint attached to a motion filed today in federal district court in Manhattan, the SEC alleges that Ramirez participated in the fraudulent scheme by helping his friend and associate Henry "Hank" Morris extract kickback payments from Aldus Equity Partners, an investment management firm that was seeking to win investment business from the New York State Common Retirement Fund (Retirement Fund). The SEC previously charged Morris and David Loglisci for orchestrating the wide-ranging scheme to enrich Morris and others, and charged Aldus and one of its founding principals, Saul Meyer, for participating in the scheme by agreeing to pay kickbacks to Morris.

"As alleged in our complaint, Ramirez conspired to extract kickback payments from an investment advisor who was seeking pension fund business," said James Clarkson, Acting Director of the SEC's New York Regional Office. "Ramirez facilitated Morris's scheme by contacting Meyer and making clear to him that Aldus must pay a kickback to gain privileged access to the hard-earned contributions of New York State's public employees."

According to the SEC's amended complaint, although Aldus was already negotiating with the Retirement Fund's investment staff about the proposed investment at the time, Aldus agreed to kick back 35 percent of its management fees to a shell entity run by Morris. Ramirez was in turn paid a portion of those fees by Morris. As a result of the quid pro quo arrangement, Aldus secured the Retirement Fund's emerging fund portfolio business, and Ramirez shared in the profits even though he performed no legitimate services.

The SEC's amended complaint alleges that Ramirez aided and abetted violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The complaint seeks permanent injunctions against future violations of the federal securities laws, disgorgement of ill-gotten gains with prejudgment interest, and financial penalties.

The SEC's investigation is continuing. In a parallel criminal action, the Office of the Attorney General of the State of New York today announced the unsealing of criminal charges against Ramirez.

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For more information, contact:

David Rosenfeld
Associate Director, SEC's New York Regional Office
(212) 336-0153

George N. Stepaniuk
Assistant Director, SEC's New York Regional Office
(212) 336-0173

Maureen F. Lewis
Branch Chief, SEC's New York Regional Office
(212) 336-0125



Modified: 05/12/2009