Division of Consumer Affairs and its Bureau of Securities
Announce $1.9 Million Settlement with Portuguese Bank
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NEWARK – Banco Espirito Santo, S.A. (“BES”), a Lisbon-based bank, and one of its affiliates, Espirito Santo e Comercial de Lisboa, Inc., a money transmitter currently licensed with the New Jersey Department of Banking and Insurance, have agreed to pay $1.9 million in civil penalties to settle an investigation by the New Jersey Bureau of Securities, within the Division of Consumer Affairs, that they allegedly violated the state’s Uniform Securities Law.
The Bureau found that BES, its affiliates and employees allegedly sold or offered to sell unregistered stocks, bonds and other securities to existing bank customers in New Jersey via telephone solicitations and direct mailings. The BES representatives and agents making these solicitations also were not registered with the N.J. Bureau of Securities as legally required. Additionally, BES, its affiliates and employees provided investment advice without having the proper registrations.
Under terms of the settlement, BES will offer rescission of the securities it sold to investors in New Jersey. There are an estimated 1,393 affected investors in New Jersey.
“Our Uniform Securities Law is designed to protect investors and we expect adherence to the law,” Attorney General Paula T. Dow said.
Some BES clients alleged that they did not receive accurate and complete disclosures about the securities they bought when they were contacted by BES’ unregistered representatives and agents. The clients reported that they were told their investments were guaranteed or would not lose value.
BES conducted its own internal review of its operating practices and cooperated with the Bureau’s investigation. BES has since revised its business practices.
“We’ve seen too many investors harmed by investment outfits operating outside our registration laws, offering unregistered securities,” noted Thomas R. Calcagni, Acting Director of the State Division of Consumer Affairs. “No one should hand over their hard-earned money before verifying that both the security and the person offering it are registered by our Bureau of Securities.”
The Bureau of Securities can be contacted toll-free within New Jersey at 1-866-I-INVEST (1-866-446-8378) or from outside New Jersey at 973-504-3600. The Bureau's web site is located at www.njsecurities.gov .
“State securities regulators are the first line of defense in protecting investors” said Amy Kopleton, Acting Bureau Chief. “As this case illustrates, we will go beyond the state’s borders, to wherever the case leads us, when New Jersey investors are affected.”
Bureau Chief of Enforcement Rudolph G. Bassman and Attorney/Investigator Sylvia Kolankiewicz handled the investigation of this matter. Deputy Attorney General Anna M. Lascurain, Securities Fraud Prosecution Section Chief, and Deputy Attorneys General Victoria A. Manning and Paul E. Minnefor, represented the Bureau.
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