Broker-Dealer Litigation - Greenberg Traurig LLP

then to his own bank account. The Commission barred Mutascio from association, and from
participating in any offering of a penny stock.
In re Gallardo, Release No. 65422, 2011 SEC LEXIS 3370 (Sept. 28, 2011).
Q.1.c(i)
An administrative law judge entered a default order against Gallardo, a former registered
representative. The Commission’s complaint alleged that Gallardo had solicited foreign
investors to provide him with approximately $1.2 million that he represented would be invested
by “professional traders” for a guaranteed rate of return. Instead, Gallardo invested a portion of
the money himself, returned approximately $275,000 as “distributions,” and misappropriated
approximately $685,000 for his personal use. The ALJ barred Gallardo from association and
from participating in the offering of any penny stock, ordered him to cease and desist from
violating the anti-fraud provisions of the federal securities laws, and ordered him to pay
$876,193 in disgorgement, $178,682.58 in prejudgment interest, and a $260,000 civil penalty.
In re Paganes, Release No. 65957, 2011 SEC LEXIS 4401 (Dec. 15, 2011).
Q.1.c(i)
An administrative law judge entered a default order against Paganes, a former managing
member of a former registered investment adviser and a former associated person of a former
registered broker-dealer, both of which served as trustee for a hedge fund. In a related action
brought by the Commission, a federal district court ordered Paganes to pay disgorgement of
$650,000, prejudgment interest of $90,339, and a $650,000 civil penalty. The Commission
alleged that Paganes approved hedge fund transactions and disbursed investor funds for uses not
permitted by relevant organizational documents, and that he had a direct, undisclosed financial
interest in at least one of the transactions he approved. The ALJ permanently enjoined Paganes
from engaging in conduct in connection with the purchase or sale of any security, and barred him
from association.
In re Caccioppoli, Release No. 66060, 2011 SEC LEXIS 4569 (Dec. 28, 2011).
Q.1.c(i)
The Commission accepted an offer of settlement from Caccioppoli, a former securities
lending representative associated with a registered broker-dealer (the “Firm”). In an earlier
proceeding brought by the Commission, a federal district court entered a judgment by consent
against Caccioppoli, permanently enjoining him from violating the antifraud provisions of the
federal securities laws. The Commission’s complaint alleged that Caccioppoli knowingly
engaged in a scheme to defraud the Firm in connection with the lending and borrowing of
securities. The Commission barred Caccioppoli from association.
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