B-D pays $20M to settle SEC charges -- but where's the firm's chairman?

The U.S. Securities and Exchange Commission won a judgment of more than $20 million against FTC Capital Markets Inc., a broker-dealer that allegedly defrauded Citgo Petroleum Corp. and its parent PDV Holdings Inc. U.S. District Judge Paul Gardephe today found FTC and its Chairman Guillermo Clamens jointly liable for a $20,931,533 judgment. FTC didn't admit or deny the allegations of the SEC complaint in consenting to the judgment. Clamens, who was also charged criminally by federal prosecutors in the office of Manhattan U.S. Attorney Preet Bharara, was ordered as well to pay $1.7 million in interest and penalties, the judge said. At the time the indictment was announced last year, U.S. prosecutors said Clamens was a fugitive. A person with familiarity of the case said he remains at large. The SEC alleged in its civil suit filed last year that though FTC Capital and its FTC Emerging Markets affiliate, Clamens defrauded Citgo and PDV “to conceal their prior fraudulent sale of $50 million in non-existent notes to a Venezuelan bank.” Both companies are owned by the Venezuelan government. Investment Fraud Prosecutors charged in their criminal case that Clamens operated a $22 million investment fraud. Prosecutors said he solicited $1.5 billion from two institutional investors and promised to place their money in safe, liquid short-term investments, according to the indictment. Instead, he used the money to buy high-risk securities, including bonds issued by an affiliate of his firm, the indictment says. The U.S. also charged FTC's operations manager Lina Lopez with Clamens. She pleaded guilty in October to conspiracy and securities fraud and awaits sentencing. William Brodsky, a lawyer for FTC, didn't immediately return a voice-mail message left at his office seeking comment. The U.S. said in the criminal case that Clamens and Lopez promised to invest hundreds of millions of dollars from two unnamed investors in short-term certificates of deposit. Instead, they bought about $200 million in risky FTC notes and Venezuelan and Argentine bonds without telling the investors, the U.S. said. The scheme unraveled as the investors sought to withdraw funds from their accounts, prosecutors said. William Brodsky, a lawyer for New York-based FTC Capital, didn't immediately return a call seeking comment.