The SEC is suing four traders affiliated with brokerage firm Direct Access Partners for their alleged involvement in a financial scam that involved millions of dollars paid in illicit bribes to a Venezuelan banking official to obtain that bank’s bond trading business.
According to the regulator, DAPs’ global markets group made fixed income trades for clients in foreign sovereign debt, generating revenue of over $66M from markup/markdown transaction fees on principal trade executions in Venezuela bonds sponsored by the state for BANDES (Banco de Desarrollo Económico y Social de Venezuela). The bank’s finance VP, María de los Ángeles González de Hernandez is accused of allegedly authorizing the illicit trades and receiving part of the revenue.
The securities scam is said to have taken place between October 2008 and at least June 2010. Because of the purported kickbacks paid to Gonzales, DAP was given the bank’s profitable trading business, while she was provided with incentives to get into trades with DAP at significant markdowns and markups regardless of the prices that BANDES paid. The traders are also accused of fooling DAP’s clearing brokers, inter-positioning one broker-dealer to cover up their involvement in the transactions, performing internal wash trades, and taking part in huge roundup trades to bulk up revenue.
Per the Commission regarding the trades: Thomas Bethancourt executed the trades that were fraudulent and kept track of the illicit markdowns/markups; Iuri Bethancourt was given over $20M in illicit proceeds through his shell company, which would pay Gonzales; Hurtado, who allegedly earned over $6M in kickbacks, was the one who paid Gonzales and acted as her intermediary with the traders; and Hurtado’s wife, Haydee Pabon, purportedly was given about $8M in markdowns/markups on BANDES trades under the guise of finders’ fees.
Read the Complaint (PDF)
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Federal Records Act Lawsuit Seeking to Make the SEC Reconstruct About 9,000 Enforcement-Related Documents is Dismissed, Institutional Investor Securities Blog, February 5, 2013
Our institutional investor fraud attorneys represent clients in the US, as well as investors located abroad with claims and lawsuits against financial firms and representatives located domestically. Contact Shepherd Smith Edwards and Kantas, LTD, LLP today.