Jury Convicts 4 Brokers Involved in Stock Scheme
A federal jury today convicted four men who were affiliated with a San Diego brokerage house on securities fraud charges related to a "pump-and-dump" scheme that cost victims more than $5 million.
The four defendants worked at a now-defunct brokerage firm, Hampton Porter Investment Bankers LLC, which sold certain stocks to clients without disclosing the company's financial interests in the stocks.
Bryan Laurienti, 50, of Peoria, Ariz.; David Montesano, 39, of Winchester, Calif.; Curtiss Parker, 45, of La Jolla, Calif.; and Donald Samaria, 37, of San Diego worked as brokers at Hampton Porter and were found guilty today of conspiracy and securities fraud after an approximate four-week trial. The maximum penalty for each count is five years in prison.
The defendants are scheduled to be sentenced by U.S. District Judge Terry Hatter Jr. on March 12, 2007.
The evidence presented to the jury showed that Hampton Porter held regular sales meetings at which Hampton Porter co-owner, John Laurienti, and former Hampton Porter retail manager, James Green, pressured brokers to sell "house stocks" -- the term given to stocks in which Hampton Porter had a special financial interest. If the brokers sold the house stocks to their customers, Hampton Porter paid the brokers additional "special incentive" compensation, which was not disclosed to the customers.
Additionally, John Laurienti and Green enforced a "no net- sales" policy, under which customers were prevented from selling their shares of house stock because brokers delayed or failed to execute sell orders. In furtherance of that policy, Hampton Porter brokers also engaged in "cross-trading," where shares of one client were sold to another client. The defendants also conducted unauthorized trades and used high-pressure sales tactics, as well as false statements, to induce customers to purchase the house stocks. As the price of the house stocks rose, Hampton Porter owners sold their holdings and realized significant profits.
The jury that convicted the four men today acquitted a fifth defendant, Michael Losse. A sixth defendant in the case, Adam Gilman, pleaded guilty in 2003 to securities fraud and was sentenced to 18 months in prison. Also in 2003, co-conspirators Gregory Walker and James Green pleaded guilty to conspiracy to commit securities fraud. In April 2005, John Laurienti pleaded guilty to the same charge. In July 2006, co-defendant Troy Peters pleaded guilty to a single count of securities fraud, as well as an extortion charge in an unrelated case from the Eastern District of New York. Walker, Green, John Laurienti and Peters will be sentenced in the coming months.
The case was co-prosecuted by the Fraud Section of the Department of Justice and the U.S. Attorney's Office. This case is the result of an investigation by the Federal Bureau of Investigation. The NASD Criminal Prosecution Assistance Group provided substantial assistance during the investigation, according to the Justice Department.
The four defendants worked at a now-defunct brokerage firm, Hampton Porter Investment Bankers LLC, which sold certain stocks to clients without disclosing the company's financial interests in the stocks.
Bryan Laurienti, 50, of Peoria, Ariz.; David Montesano, 39, of Winchester, Calif.; Curtiss Parker, 45, of La Jolla, Calif.; and Donald Samaria, 37, of San Diego worked as brokers at Hampton Porter and were found guilty today of conspiracy and securities fraud after an approximate four-week trial. The maximum penalty for each count is five years in prison.
The defendants are scheduled to be sentenced by U.S. District Judge Terry Hatter Jr. on March 12, 2007.
The evidence presented to the jury showed that Hampton Porter held regular sales meetings at which Hampton Porter co-owner, John Laurienti, and former Hampton Porter retail manager, James Green, pressured brokers to sell "house stocks" -- the term given to stocks in which Hampton Porter had a special financial interest. If the brokers sold the house stocks to their customers, Hampton Porter paid the brokers additional "special incentive" compensation, which was not disclosed to the customers.
Additionally, John Laurienti and Green enforced a "no net- sales" policy, under which customers were prevented from selling their shares of house stock because brokers delayed or failed to execute sell orders. In furtherance of that policy, Hampton Porter brokers also engaged in "cross-trading," where shares of one client were sold to another client. The defendants also conducted unauthorized trades and used high-pressure sales tactics, as well as false statements, to induce customers to purchase the house stocks. As the price of the house stocks rose, Hampton Porter owners sold their holdings and realized significant profits.
The jury that convicted the four men today acquitted a fifth defendant, Michael Losse. A sixth defendant in the case, Adam Gilman, pleaded guilty in 2003 to securities fraud and was sentenced to 18 months in prison. Also in 2003, co-conspirators Gregory Walker and James Green pleaded guilty to conspiracy to commit securities fraud. In April 2005, John Laurienti pleaded guilty to the same charge. In July 2006, co-defendant Troy Peters pleaded guilty to a single count of securities fraud, as well as an extortion charge in an unrelated case from the Eastern District of New York. Walker, Green, John Laurienti and Peters will be sentenced in the coming months.
The case was co-prosecuted by the Fraud Section of the Department of Justice and the U.S. Attorney's Office. This case is the result of an investigation by the Federal Bureau of Investigation. The NASD Criminal Prosecution Assistance Group provided substantial assistance during the investigation, according to the Justice Department.
posted by Scott Nance at
12/07/2006 09:37:00 PM
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