WASHINGTON -- The Securities and Exchange Commission said Friday that it has barred the alleged mastermind of a fraud scheme that involved the sale of $29 million of bogus municipal bonds and an associate from committing further violations of the federal securities laws.
The SEC said that John A. Genetti and Westley Seher, who were officials at FSG Financial of Beverly Hills, Calif., agreed to the penalty without admitting or denying charges that they defrauded hundreds of investors nationwide from 1984 to 1991.
Genetti was sentenced in February 1993 by a federal court to 11 years in prison for his part in the scheme. Scher was sentenced in May 1993 to
The SEC ordered each to disgorge roughly $25 million in profits from the scheme, but the payment has been waived because the two are unable to pay.
The commission also announced Friday that it has filed a complaint in the U.S. District Court for the Central District of California against Louis F. Vargas, another participant in the scheme, who is also serving a prison sentence for his role.
The SEC said the defendants operated a series of boiler-room entities called Reserve Financial Group, First Securities Group of California Inc., FSG Financial Services Inc., and Century Asset Management Inc.