For Immediate Release
October 20, 2009 United States Attorney's Office
Southern District of New York
Contact: (212) 637-2600
Manhattan United States Attorney Charges Chairman of Brokerage Firm with $22 Million Investment Fraud

PREET BHARARA, the United States Attorney for the Southern District of New York, announced that a federal grand jury returned an Indictment today against GUILLERMO A. CLAMENS, the Chairman of New York-based brokerage firm FTC Capital Markets, charging him with conspiracy, securities fraud and wire fraud stemming from an alleged $22 million investment fraud. According to the Indictment filed today and the Complaint previously filed on May 19, 2009, in Manhattan federal court:

From at least April 2008 through November 2008, CLAMENS solicited funds from two institutional investors and promised to place their money in safe, adequately liquid, short-term investments. As a result, the victim institutional investors deposited approximately $1.5 billion into the accounts managed by CLAMENS. CLAMENS, and others acting at his direction, made repeated misrepresentations that the investor funds had been invested as promised, and misappropriated the funds to make unauthorized purchases of high risk securities—including bonds issued by an affiliate of FTC Capital Markets. To conceal the fraud, CLAMENS and others acting at his direction sent fictitious account statements showing that safe, low-risk, investments had been made in those accounts. The two institutional investors lost approximately $22 million as a result of the scheme, which began to unravel when CLAMENS and NAZLY CUCUNUBA LOPEZ, a/k/a "Lina Lopez"—then the Operations Manager of FTC Capital Markets—were unable to fully comply with the investors' requests for the return of certain funds.

On October 16, 2009, CUCUNUBA LOPEZ, 33, of Miami, Florida, pleaded guilty in Manhattan federal court before United States District Judge ROBERT P. PATTERSON to conspiracy and securities fraud charges in connection with her role in the scheme orchestrated by CLAMENS.

CLAMENS 46, of New York, New York, is charged in the Indictment with one count of conspiracy to commit securities fraud and wire fraud, one count of securities fraud, and one count of wire fraud. The conspiracy count carries a maximum sentence of five years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense; the securities fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense; the wire fraud count carries a maximum sentence of 20 years in prison and a maximum fine of $250,000, or twice the gross gain or loss from the offense. In addition, the Indictment seeks to forfeit $1.5 billion.

The case was assigned to United States District Judge COLLEEN McMAHON.

CLAMENS remains at large.

Mr. BHARARA praised the investigative work of the United States Postal Inspection Service in this case, and thanked the United States Securities and Exchange Commission for their assistance. He added that the investigation is continuing. Assistant United States Attorneys JOHN J. O'DONNELL, ANTONIA M. APPS, and JEFFREY ALBERTS are in charge of the prosecution.

The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21052 / May 20, 2009
Securities and Exchange Commission v. FTC Capital Markets, Inc., FTC Emerging Markets, Inc. also d/b/a FTC Group, Guillermo David Clamens and Lina Lopez a/k/a Nazly Cucunuba Lopez, 09 Civ. 4755(PGG) (S.D.N.Y.) (May 20, 2009)
SEC Charges Registered Broker-Dealer, Its Unregistered Affiliate and Two Individuals in Fraudulent Scheme to Pay Off Ficticious Bonds With Tens Of Millions In Unauthorized Trading

On May 19, 2009, the Commission filed a civil injunctive action charging Guillermo David Clamens, FTC Capital Markets, Inc., a registered broker-dealer he controls, ("FTC"), and Lina Lopez, an FTC employee, with a fraudulent scheme to engage in tens of millions of dollars of unauthorized securities trading through the accounts of two FTC customers. Clamens and Lopez defrauded FTC's customers in part to conceal their prior fraudulent sale of $50 million in non-existent notes to a Venezuelan bank through another Clamens-controlled entity, Emerging Markets. When the fictitious notes held by the Venezuelan bank purportedly came due in August 2008, Clamens misappropriated $50 million from FTC's customers to fund the redemption. In addition, the Complaint alleges that Emerging Markets is an unregistered broker-dealer.

The complaint names the following defendants:

* FTC Capital Markets, Inc. ("FTC"), a registered broker-dealer headquartered in midtown Manhattan with an office in Miami, Florida. Clamens is FTC's chairman and, until recently, chief executive officer, and controls the management and policies of FTC. Throughout the relevant period, the FTC engaged in a general securities business, transacting in debt and equity securities on behalf of mostly South American institutional customers.

* FTC Emerging Markets, also d/b/a FTC Group (collectively "Emerging Markets"), a Panamanian-based affiliate of FTC with offices in New York, Miami, London, Caracas, Lima and Mexico. According to FTC Group's website, is a conglomerate of financial services companies including Emerging Markets and FTC, among others, that provides investment banking services to foreign banks, pension funds, insurance companies, asset managers and financial advisers

* Clamens, age 45, a registered representative and the chairman of FTC and a principal of all the entities in the FTC Group. Defendant Clamens is a citizen of Venezuela and a permanent resident of the United States who maintains a residence in New York, New York.

* Lina Lopez (a/k/a Nazly Cucunuba Lopez), age 34, an employee of FTC and/or various FTC affiliates who works in FTC's Miami office. Defendant Lopez is a citizen of Venezuela and a permanent resident of the United States who maintains a residence in Miami, Florida.

The Complaint alleges that, in furtherance of their Ponzi-like scheme, defendant Clamens, assisted by defendant Lopez, knowingly caused FTC to make unauthorized purchases of securities for the two customer's FTC accounts, knowingly prepared and sent the customers false account statements that omitted the unauthorized securities trades and falsely listed holdings exclusively in short-term, low-risk, liquid investments of the type that the customers authorized FTC to make on its behalf but which were not made. In addition, Clamens and Lopez caused the Venezuelan bank to receive statements for its account falsely stating that it held the $50 million in (fictitious) notes. In addition, defendant Emerging Markets effected, or purported to effect, securities transactions for its own account and on behalf of numerous foreign investors, without having properly registered as a broker-dealer with the Commission or other appropriate authority. Emerging Markets thus has illegally acted as an unregistered broker-dealer.

As a result of this conduct, the Complaint alleges that defendants FTC, Emerging Markets, Clamens and Lopez violated Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder; defendant FTC violated Section 15(c) of the Exchange Act; defendant Emerging Markets violated Section 15(a) of the Exchange Act; and defendants Clamens and Lopez aided and abetted FTC's violations of Exchange Act Section 15(c) and Emerging Markets' violations of Exchange Act Section 15(a). In its Complaint, the Commission seeks permanent injunctions, disgorgement and prejudgment interest and civil penalties against all defendants.

The Commission acknowledges the assistance of the United States Attorney for the Southern District of New York and the Financial Services Authority of the United Kingdom in this matter.

SEC Complaint

August 10, 2009
Man in the News | Preet Bharara
For Manhattan’s Next U.S. Attorney, Politics and Prosecution Don’t Mix
By BENJAMIN WEISER, NY TIMES

He worked for one of the most partisan Democratic senators in Washington, and a few years ago helped to uncover political maneuverings by the Justice Department in the administration of President George W. Bush. But perhaps the most telling aspect about Preet Bharara, the next United States attorney in Manhattan, may be how he managed to win the trust and respect of even those who might have been his natural opponents.

Mr. Bharara, who served as the chief counsel to Senator Charles E. Schumer of New York, played a major role in the Senate Judiciary Committee’s investigation into the firings of United States attorneys around the country. As he took sworn testimony from witnesses, handled the issuance of subpoenas and negotiated with administration officials over the production of documents and other materials, he drew praise for his evenhanded approach.

He even won over one fired prosecutor, David C. Iglesias of New Mexico, a Republican who said he had wavered over whether to testify voluntarily before the panel, fearing that it would degenerate into a “partisan circus.” But after their conversations, Mr. Iglesias said, he concluded that Mr. Bharara was approaching the investigation like a prosecutor, not a politician. “It gave me a lot of assurance," Mr. Iglesias said. “He completely understood what was at stake here.”

A key factor, Mr. Iglesias added, was that Mr. Bharara had formerly worked as a prosecutor in the United States attorney’s office in Manhattan, an office with a reputation for independence and nonpartisanship.

Now, Mr. Bharara, 40, will be asked to carry on that tradition. On Friday, the Senate confirmed him to be the next United States attorney for the Southern District of New York.

Although he declined to comment for this article, he spoke last year about his role in the Senate inquiry and his feelings that a line between federal prosecutors and politics had been crossed. “You’re talking about the Department of Justice,” he said, “that employs 100,000 people, that used to be led by Bobby Kennedy, that a lot of people in America look to.”

IN his new post, Mr. Bharara will oversee more than 200 lawyers who handle some of the country’s most prominent cases, like the prosecution of Bernard L. Madoff for his multibillion-dollar Ponzi scheme.

As a naturalized American citizen from India, Mr. Bharara also brings a diversity of background to the post.

And while recent United States attorneys in Manhattan have come directly from prosecutors’ jobs, Mr. Bharara’s background on Capitol Hill will serve him well, said Daniel C. Richman, a law professor at Columbia University and a former Southern District prosecutor.

“He contributes things that we’ve not seen before,” Professor Richman said. “He’s thought hard about what a U.S. attorney’s place should be within a broader federal enforcement system and the train wrecks that can develop when unthinking or ill-thinking bureaucrats tamper with that.”

Preetinder S. Bharara was born in Ferozepur, India, and he was an infant when his parents immigrated to the United States in 1970. He grew up in Monmouth County, N.J., and graduated from Harvard in 1990 and Columbia Law School in 1993. That summer, he worked for several weeks as a volunteer in Mark Green’s campaign for public advocate, occasionally driving the candidate to campaign events.

He has reflected on his roots and the improbable journey his family took to get to this country.

His father, a Sikh, and his mother, who was Hindu, were born in what is now Pakistan, before India and Pakistan were separate countries. In the violent migration that occurred after the 1947 partition, his father and mother both moved to the Indian side, with their families losing property and most of their possessions, Mr. Bharara has said.

His wife’s father, a Muslim, also moved, from the Indian side into Pakistan, also losing his home “and much, much more,” as Mr. Bharara put it. And his wife’s mother was born in Palestine, after her father, who was Jewish, escaped with his family from Nazi Germany.

“Four different families, practicing four different faiths — all compelled to flee a half century ago because of their religion,” Mr. Bharara said in a speech to the South Asian Bar Association of New York in 2007.

“It also means,” he joked, “that even when my wife fasts for Yom Kippur, and my father-in-law fasts for Ramadan, I get to stuff my face with samosas all day.”

In 2000, after about six years in private practice, Mr. Bharara became a Southern District prosecutor, first under Mary Jo White, and later under James B. Comey. For five years, he prosecuted organized crime, narcotics and securities fraud, among other crimes. One major case, with dozens of defendants, involved Chinese organized crime.

He was a hard worker who had a self-deprecating wit and stayed cool under pressure, according to former associates. “Preet was one of those guys in the office who everyone wanted to try a case with,” said Christopher P. Conniff, a prosecutor at the time.

IN 2005, Mr. Bharara became Senator Schumer’s chief counsel. Former colleagues described him as a skilled staff member in a political caldron where Democrats were often negotiating among themselves as much as they were with Republicans.

“He does have an incredible manner and ability to work with others,” said the New Jersey attorney general, Anne Milgram, who in 2005 served as counsel to Jon S. Corzine, then a United States senator, and got to know Mr. Bharara through their work on judiciary issues.

“He never carries himself like he’s the smartest guy in the room, even though he often is,” she added.

Mr. Bharara said in a speech in 2007, “Party affiliation can’t tell you whether to indict a case, whether to plead it out, or how to try it.”

His approach has allowed him to remain close to people with whom he otherwise disagrees sharply. One friend from college, Viet D. Dinh, who served as an assistant attorney general in the George W. Bush administration and now teaches law at Georgetown University, said, “To this day I cannot find a single big political philosophical issue upon which Preet and I agree, but I can’t imagine two other people trusting each other implicitly the way Preet and I do.”

During the Judiciary Committee’s investigation into the prosecutor firings, Mr. Bharara was aided by his background as a federal prosecutor in Manhattan.

“To the extent that Preet was the driving force of the investigation, it was conducted in a completely fair, thorough and professional manner,” said Michael M. Purpura, a former Southern District colleague who was a senior lawyer in the Bush Justice Department and later an associate White House counsel.

The investigation, along with a separate inquiry by the House Judiciary Committee, culminated in the 2007 resignation of Attorney General Alberto R. Gonzales.

Mr. Bharara, in a bar association talk last year, said that the investigation’s focus had been not only on whether there had been violations of law, but also on whether “the great traditions of the department were violated.”

He added, “The more that was uncovered, the more it seemed clear that there was politicization,” not only in how United States attorneys were being fired or hired, but even at the lowest level — “the line level,” as he put it — “where there should never be any politics at all.”