Related topics

Elio Indicted, Sued By SEC Over Hidden Commissions From Aetna

November 5, 1993

BOSTON (AP) _ A Boston investment adviser accused of taking kickbacks from companies he recommended to investors was charged Thursday with defrauding clients, including 20 public pension funds.

Carmen W. Elio, of Osterville, Mass., was indicted by a federal grand jury in Boston for accepting $805,913 in commissions and $56,000 in consulting fees from Aetna Life Insurance Co. in exchange for recommending that clients take contracts with the company to buy securities and make investments.

The Securities and Exchange Commission sued Elio and his firm, Faneuil Hall Securities Inc., for concealing from clients that he had received commissions from Aetna and other companies.

The SEC is asking a federal judge to order Elio to return a minimum of $1.8 million in hidden compensation and pay unspecified fines.

Aetna agreed in August to pay $5.2 million to settle charges in the case.

U.S. Attorney A. John Pappalardo said the accusations against Elio stemmed from the case against Aetna. He said Aetna had cooperated with investigators.

″In the civil settlement between the SEC and Aetna, vastly more serious conduct was alleged against Aetna than has been alleged by the SEC against Mr. Elio,″ Stephen Delinsky, Elio’s attorney, said Thursday.

Elio ″acted under the direction and absolute supervision of Aetna″ at all times, Delinsky said.

The SEC charged that between 1982 and 1991, Elio and his firm recommended investments and advisory services offered by Aetna Life Insurance Co., Aetna Capital Management Inc. and Lombard Odier International Portfolio Management Ltd., without revealing they were paying him to find investors.

Twenty public pension funds invested nearly $253 million in the Aetna subsidiaries and another $10 million in Lombard Odier, the SEC said.

If convicted, Elio faces up to 45 years in prison and $1.5 million in fines.

Update hourly