U.S. Department of Justice Marcos Daniel
Jiménez |
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99
N.E. 4th Street Miami, FL 33132 (305) 961-9001 |
PRESS RELEASE |
FOR IMMEDIATE RELEASE |
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March 11, 2004 | Matthew Dates, Special Counsel for Public Affairs, (305) 961-9285 |
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FORMER
HEAD OF BROKERAGE FIRM PLEADS GUILTY TO SECURITIES FRAUD
Marcos Daniel Jiménez,
United States Attorney for the Southern District of Florida, and Jonathan
I. Solomon, Special Agent in Charge of the Federal Bureau of Investigation
(FBI), Miami Field office, announced today that Mark Valentine, the former
Chairman of Thomson Kernaghan, a Toronto, Canada based brokerage firm, pleaded
guilty yesterday to one count of securities fraud in United States District
Court, Fort Lauderdale, Florida. The defendant faces a maximum term of ten
years imprisonment, to be followed by a term of supervised release,
a fine of up to $250,000 and the imposition of court costs. Sentencing is
presently scheduled for May 21, 2004, before United States District Court
Judge James Cohn.
This conviction stemmed from a two-year undercover investigation conducted
by the FBI, named Operation Bermuda Short, which targeted corrupt practices
in the securities industry in South Florida. An agent of the FBI, acting in
an undercover capacity, posed as a corrupt securities trader employed by a
United States-based representative of a fictitious foreign mutual fund that
had a number of investors who had invested millions of dollars. The undercover
agent claimed that he worked with two due diligence officers whose job was
to research and approve which securities the agent would be allowed to purchase
on behalf of the mutual funds investors. The undercover agent also claimed
that a purported manager of the mutual fund was corrupt and had knowledge
of the agents corrupt activities concerning the fund.
In the part of the investigation involving Valentine, the defendant had agreed to arrange the sale of stock in a publicly traded company called Softquad Software Ltd., a Delaware based holding company, to the fictitious mutual fund, knowing or believing that approximately 25% of the sale price would be paid back to the brokers and manager of the fund in the form of an undisclosed commission or kickback. Valentine had also been told that the due diligence officers of the fund had been paid off to approve the sale.
Mr. Jiménez commended the investigative efforts of the Federal Bureau of Investigation, as well as the cooperative efforts of the Southeast Regional Office of the United States Securities and Exchange Commission and the Criminal Prosecution Assistance Group of the NASD. The case pertaining to Valentine is being prosecuted by Assistant United States Attorneys Edward C. Nucci and Roger H. Stefin.
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