Jason Galanis Sentenced To More Than 11 Years In Prison For Securities Fraud

[nitpicker]

https://www.justice.gov/usao-sdny/pr/jason-galanis-sentenced-more-11-years-prison-securities-fraud

Department of Justice
U.S. Attorney’s Office
Southern District of New York

FOR IMMEDIATE RELEASE
Wednesday, February 15, 2017

Jason Galanis Sentenced To More Than 11 Years In Prison For Securities Fraud

Preet Bharara, the United States Attorney for the Southern District of New York, announced that JASON GALANIS was sentenced today to 135 months in prison for manipulating the market for Gerova Financial Group, Ltd. (“Gerova”), a publicly traded company listed on the New York Stock Exchange, and to defrauding the shareholders of that company. JASON GALANIS was also sentenced for defrauding the clients of an investment advisory firm. JASON GALANIS pled guilty on July 21, 2016, to two counts of conspiracy to commit securities fraud, one count of securities fraud and one count of investment adviser fraud. GALANIS was sentenced today by United States District Judge P. Kevin Castel.

From 2009 to 2011, JASON GALANIS, along with his co-conspirators John Galanis, Gary Hirst, Derek Galanis, Ymer Shahini, and Gavin Hamels, engaged in a scheme to defraud the shareholders of Gerova and the investing public by effecting securities transactions in Gerova stock for the purpose of conferring millions of dollars of undisclosed remuneration on JASON GALANIS and his co-conspirators, without adequate disclosure of JASON GALANIS’s role in directing the transactions or the benefits received by JASON GALANIS and his co-conspirators.
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JASON GALANIS, among others, also fraudulently induced investment advisers, including Gavin Hamels, to purchase shares of Gerova stock in the investment advisers’ client accounts by offering compensation and/or other benefits to the respective investment adviser. By causing the purchase of Gerova stock at the time, quantity, and/or price of their choosing, JASON GALANIS and others were able to, among other things, effectuate the sale of large quantities of Gerova stock from the Shahini Accounts that JASON GALANIS controlled while artificially maintaining the price of Gerova stock through coordinated match trading. Such coordinated trading served to manipulate the market for Gerova stock and deceive the investing public. As a result, JASON GALANIS and his co-conspirators reaped nearly $20 million in profits.
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From 2007 to 2010, JASON GALANIS, along with an investment adviser named James Tagliaferri, participated in a scheme to defraud the clients of Tagliaferri’s investment advisory firm, which was called TAG Virgin Islands, Inc. (“TAG”). Often in exchange for compensation from JASON GALANIS, Tagliaferri caused TAG’s clients to invest in notes issued by entities associated with JASON GALANIS. When obligations owed by entities associated with JASON GALANIS became due, Tagliaferri used client funds to purchase either notes issued by other entities associated with JASON GALANIS or publicly traded shares held by such entities. The funds generated were then used to pay the original obligations owed to other TAG clients. Through these securities trades, funds in client accounts of one set of TAG investors were used to pay obligations owed to a different set of TAG investors by entities associated with JASON GALANIS.

In addition to the prison term, GALANIS, 46, was sentenced to three years of supervised release, and was ordered to forfeit $37,591,681.10, as well as his interests in properties in New York and Los Angeles. Judge Castel will set a restitution amount at a future proceeding.
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