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The Blotter Report: Sneaky Suspects

The Blotter Report: Sneaky Suspects

Straight to the Top

The owner of a failed New York City-based brokerage firm and his partner are the latest to be implicated in a wide-ranging kickback scheme used to secure the bond trading business of a Venezuelan bank.

Authorities claim the CEO, Benito Chinea, and managing partner of global strategy, Joseph DeMeneses, of the now bankrupt Direct Access Partners were directly involved in devising and facilitating sham arrangements to conceal multi-million dollar payments that acted as kickbacks to a high-ranking Venezuelan finance official of the bank. 

“The corruption at Direct Access Partners reached the very top,” Andrew M. Calamari, director of the SEC’s New York Regional Office, said in a statement Monday. “The schemers depended on Chinea as CEO to authorize outsized payments from the firm to be funneled as kickbacks to Venezuela.”

The ongoing investigation, conducted in conjunction with the FBI, SEC, the Department of Justice and the U.S. Attorney’s office, has already netted seven indictments for those connected to the firm.  Along with Chinea and DeMeneses, five other individuals with ties to the brokerage firm, including the head of DAP’s Miami office, have been charged for their various roles in the scheme.

According to the SEC, it was an examination by the New York office's broker-dealer examination staff of DAP that that led to the current investigation.


Risky Business

A Honolulu woman faces charges for allegedly swindling investors using social media platforms to push a phony hedge fund.

The SEC busted Keiko Kawamura, 27, last week for fraudulently setting up an investment advice website that claimed she was an experienced advisor managing a successful hedge fund. In reality, the SEC says Kawamura had only limited investment experience trading no more than $10,000 in brokerage accounts for her and a boyfriend.

Kawamura raised about $200,000 for the alleged fund, but spent much of the money on a luxury lifestyle and trips to Miami and London. What she did invest, Kawamura lost in risky options trading, the SEC says. Kawamura also collected approximately $50,000 in fees from over 70 subscribers.

The regualtor filed a cease-and-desist order instituting administrative proceedings against Kawamura, alleging the unregistered advisor willfully violated the Securities Act and the Investment Advisors Act, among other charges.

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