South Florida Arbitration & Litigation Lawyer Blog
Securities and Investment Fraud and Misrepresentation Litigation and FINRA Arbitration Attorney, Russell L. Forkey, Esq.
January, 2012:
In the Matter of William Echeverri
Recently, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (Order) against William Echeverri. Echeverri, 40, is a resident of Park Ridge, NJ. The Order finds that Echeverri was a registered representative associated with broker-dealers registered with the Commission, and that on December 27, 2011, a final judgment was entered by consent against Echeverri, enjoining him from violating Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, in the civil action SEC v. William Echeverri, et al., Civil Action No. 2:11-cv-07314 (D.N.J.). The Commission’s complaint alleged that on June 5, 2008, Echeverri received material, nonpublic information from an executive at Vital Signs, Inc. concerning an offer by GE Healthcare, a wholly owned subsidiary of the General Electric Co. (GE), to acquire the company. The complaint alleged that the day after receiving the tip, Echeverri began buying shares of Vital Signs in an outside account that he concealed from his employer, eventually making over $150,000 in illicit profits when he sold his holdings after the takeover was announced on July 24, 2008. The complaint further alleged that Echeverri also tipped five others about the GE offer, and that his tippees made approximately $190,000 in ill-gotten gains on their trading in Vital Signs.
Based on the above, the Order bars Echeverri from association with any broker, dealer, investment adviser, municipal securities dealer or transfer agent, and from participating in any offering of a penny stock. Echeverri consented to the issuance of the Order without admitting or denying any of the Commission’s findings, except the court’s December 27, 2011 entry of the final judgment, which Echeverri admitted.
On December 27, 2011, Judge William H. Walls of the United States District Court for the District of New Jersey also entered final judgments by consent against six of Echeverri’s seven codefendants: John R. Easom, Robert Miketich, Victor H. Echeverri, Joseph F. Mancuso, Paul S. Qassis and Gary S. Saggu. The court’s December 27, 2011 final judgments enjoined each of these defendants from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and imposed the following relief:
- Barred Easom from serving as an officer or director of a publicly traded company for five years, and ordered him to pay disgorgement of $327, prejudgment interest of $50.75, and a civil penalty of $10,000. The terms of Easom’s settlement reflected credit given to him by the Commission for his substantial assistance in its investigation and anticipated cooperation in its pending enforcement action. The Commission also considered his sworn statements concerning his financial condition.
- Ordered Echeverri to pay disgorgement of $150,121.19, prejudgment interest of $22,450.59, and a civil penalty of $227,428.22.
- Ordered Victor Echeverri to pay disgorgement of $12,477.19 and prejudgment interest of $1,829.52, but waived payment and did not impose a civil penalty based on his inability to pay.
- Ordered Miketich to pay disgorgement of $31,455, prejudgment interest of $4,252.20, and a civil penalty of $41,455.
- Ordered Mancuso to pay disgorgement of $61,367.01, prejudgment interest of $8,998.13, and a civil penalty of $61,367.01.
- Ordered Qassis to pay disgorgement of $22,167.64, prejudgment interest of $3,082.17, and a civil penalty of $80,000.
- Ordered Saggu to pay disgorgement of $111,494.29, prejudgment interest of $15,073.97, and a civil penalty of $55,747.14.
The Commission’s action remains pending against the final defendant, Rory E. Tringali.