UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NO.

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF

Plaintiff Securities and Exchange Commission (the "Commission") alleges and states as follows:

I. INTRODUCTION

1. This action involves egregious violations of the federal securities laws, including the outright theft of advisory clients' and investors' funds by Defendant Luis Giro ("Giro"), a purported "investment adviser" operating through his wholly-owned company Giro Investments Group, Inc. ("Giro Investments"). From approximately March 1997 through October 2001, Giro conned at least 20 victims -- made up of relatives, neighbors and long time family friends -- out of more than $2,370,000. Giro assured his victims that their funds were safe, falsely telling them that he was making risk free or low risk investments and generating exorbitant returns. Giro further lulled his victims by providing them with monthly account statements showing fictitious returns. In truth, Giro was engaging in highly speculative trading, which resulted in massive losses to his clients and investors. He also misappropriated his victims' funds to himself and his family, to pay the business expenses of Giro and, in a Ponzi-like fashion, to make interest payment to his clients and investors.

2. The Commission brings this action to enjoin Giro from continuing to violate Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10b of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 ("Advisers Act") and aiding and abetting Giro Investments' violations of Sections 206(1) and 206(2) of the Advisers Act. In addition to a permanent injunction, the Commission also seeks an order requiring Giro to disgorge his ill-gotten gains, with prejudgment interest, and the imposition of a civil penalty.

II. THE DEFENDANT

3. Giro is 41 years old and, during the relevant time period, resided in Miami, Florida. Upon information and belief, Giro continues to reside in Dade County, Florida and may be concealing his whereabouts. Giro was the sole officer and director of Giro Investments, a Florida corporation located in Miami Springs, Florida. From its inception in March 1997 through October 2001, Giro Investments was owned and operated by Giro as an unregistered investment adviser. In October 2002, the State of Florida administratively dissolved Giro Investments.

III. JURISDICTION AND VENUE

4. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d) and 22(a) of the Securities Act, 15 U.S.C. §§ 77t(b), 77t(d) and 77v(a); Sections 21(d), 21(e), and 27 of the Exchange Act, 15 U.S.C. §§ 78u(d), 78u(e) and 78aa; and Section 214 of the Advisers Act, 15 U.S.C. § 80b-14.

5. The Southern District of Florida is the proper venue for this action. Certain actions and transactions alleged and stated herein constitute violations of the Securities Act, the Exchange Act and the Advisers Act, and have occurred within the Southern District of Florida. In addition, upon information and belief, Giro currently resides in the Southern District of Florida.

6. Giro, directly and indirectly, has made use of the means and instrumentalities of interstate commerce, the means and instruments of transportation and communication in interstate commerce, and the mails, in connection with the acts, practices and courses of business complained of herein.

IV. THE FRAUDULENT SCHEME

A. Giro's Advisory Clients

7. From at least March 1997 through October 2001, Giro solicited $1,402,196 from individuals who became advisory clients. Among other things, Giro told his clients that, through Giro Investments, he would invest their funds in the stock market, without any risk to their principal, and provide rates of return between 15% and 30%.

B. Investors in Giro Investments

8. In addition to soliciting investment advisory clients for Giro Investments, Giro also conducted a "private offering" in Giro Investments. Giro raised at least $967,821 from investors through the sale of purported venture capital investments.

C. Misrepresentations and Omissions

9. Giro made numerous egregious misrepresentations and omissions to his advisory clients and Giro Investments investors in connection with his solicitation of funds, including, but not limited to, the safety and profitability of their investments, his own personal background, and the security and amount of Giro Investments' assets.

Chair on The New York Stock Exchange

10. Giro told his victims that he was either a stockbroker or an investment adviser who owned a "chair" (or "seat") on the New York Stock Exchange ("NYSE" or "exchange") that enabled him to make profitable, safe and secure investments by trading securities. Giro claimed that his NYSE chair gave him a daily advantage and access to inside information not available to brokers who work outside the NYSE. Giro never owned a seat on the NYSE. Indeed, Giro conducted his trading activity solely from his home computer and received his only inside information from "CNBC."

Security of Profitable Investments

11. Giro told his victims that he guaranteed an annual return between 15% and 30%, purportedly depending on the amount of a victim's initial investment or the growth of Giro Investments. Giro also told his victims that the daily stock market activity had no effect on the security and safety of their investment principal and earnings. Giro told at least two of his victims that he would return their monies at the first sign of any risk.

12. In contrast to these misrepresentations, Giro used his victims' funds to engage in risky and speculative day trading through an online brokerage account at TD Waterhouse Investor Services, Inc. (the "brokerage account"). From January 1998 through October 2001, Giro deposited victim funds in the total amount of $1,709,500 in the brokerage account. Giro lost all of these funds through buying and selling stock on margin, short sales, or misappropriation. As of October 31, 2001, the brokerage account had a balance of $12.39.

False Monthly Account Statements

13. Giro lulled his victims by, among other things, fabricating monthly account statements. Each false statement showed an increasing balance (the victim's investment principal increasing by the guaranteed monthly rate of return) that did not exist. An account would decrease only if a victim requested withdrawals of principal and earnings.

Misleading and False Newsletter

14. Giro also created monthly newsletters. On September 19, 2001, Giro published a newsletter that reflected on the September 11, 2001 terrorist attacks and, among other things, falsely stated: "we would like to reassure all of our investors that despite recent developments, all of Giro Investments Group assets, account information and account records are safe." This statement was blatantly false because as of August 31, 2001, Giro only had $68,699 left of the $2.3 million entrusted to him by his victims.

TD Waterhouse Market Maker

15. In at least one instance, Giro told an investor, who purchased the venture capital investment, that he was one of thirty market makers for "TD Waterhouse," which offered him contracts to purchase and sell blocks of stock on the floor of NYSE. Giro was not, nor has ever been, a market maker for "TD Waterhouse." Furthermore, since Giro was not a member of the NYSE, he could not purchase or sell shares from the floor of the NYSE.

False Offering Materials Provided to Venture Capital Investors

16. In connection with his "private placement" in Giro Investments, Giro created offering materials that consisted of two versions of a brochure identified as "a proposal for a private offering for venture capital in Giro Investments Group, Inc.," which were replete with misrepresentations and omissions.

17. One version of Giro Investments' brochures stated, "[a]ll deposits in Giro Investments Group, Inc. are insured by the FDIC." This statement was a patent lie because Giro deposited a large portion of investor funds in a brokerage account, which, as specifically stated in its account statement, was not FDIC insured.

18. Giro Investment's brochure stated that Giro "began his career in the securities industry in 1980 in the Mutual Funds Department of Merrill Lynch" as a "commissions control specialist responsible for processing worldwide transactions for such mutual funds as Putnam, Fidelity, Oppenheimer, Prudential ...." In reality, Giro was nothing more than a low-level tax reporting service clerk for Merrill Lynch from 1983 to 1985.

19. The brochure also claimed, "Giro Investments Group management and trading teams share a certain value in attracting and retaining our much-valued investors. Giro Investments Group takes pride in its selection of investment professionals...." Contrary to these representations, Giro Investments never had any investment professionals or any management and trading teams on its staff.

20. Finally, one of Giro Investments' brochures falsely represented one of the investments it made. According to one version of the brochure, Giro claimed that Giro Investments sought "to maximize capital appreciation by investing in the foreign exchange market (FOREX)...." Giro Investments never invested in the foreign exchange market.

D. Giro's Misappropriation of Victims' Funds

21. Giro received $2,370,017 in funds from his advisory clients and investors in Giro Investments. He deposited $59,313 of those funds into a personal checking account he owned jointly with his wife, and $2,113,703 into Giro Investments' checking account. The disposition of the other $197,000 of investor funds is unknown.

22. By the end of October 2001, Giro had spent or lost all the funds entrusted to him by his clients and investors: Giro used $374,510 of the funds in the Giro Investments' checking account to make "Ponzi-like" interest and withdrawal payments to certain victims; Giro lost $730,000 in risky day trading and margin interest costs; he diverted $480,124 to pay Giro Investments' business expenses; and misappropriated another $526,717 for himself and his family, including transferring $113,988 to his parents and $5,200 to his brother's family.

COUNT I

FRAUD IN VIOLATION OF
SECTION 17(a)(1) OF THE SECURITIES ACT

23. The Commission realleges and repeats its allegations set forth at paragraphs 1-22 of this Complaint as if fully restated herein.

24. Since a date unknown but since at least March 1997 through October 2001, Giro, directly and indirectly, by use of the means or instruments of transportation or communication in interstate commerce and by use of the mails, in the offer or sale of securities, as described herein, knowingly, willfully or recklessly employed devices, schemes or artifices to defraud.

25. By reason of the foregoing, Giro, directly and indirectly, has violated and, unless enjoined, will continue to violate Section 17(a)(1) of the Securities Act, 15 U.S.C. § 77q(a)(1).

COUNT II

FRAUD IN VIOLATION OF
SECTION 10(b) OF THE EXCHANGE ACT AND RULE 10b-5

26. The Commission realleges and repeats its allegations set forth at paragraphs 1-22 of this Complaint as if fully restated herein.

27. Since a date unknown but since at least March 1997 through October 2001, Giro, directly and indirectly, by use of the means and instrumentality of interstate commerce, and of the mails, and of any facility of any national securities exchange, in connection with the purchase or sale of the securities, as described herein, has been, knowingly, willfully or recklessly: (i) employing devices, schemes or artifices to defraud; (ii) making untrue statements of material facts and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (iii) engaging in acts, practices and courses of business which have operated as a fraud upon the purchasers of such securities.

28. By reason of the foregoing, Giro, directly or indirectly, has violated and, unless enjoined, may continue to violate Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b) and Rule 10b-5, 17 C.F.R. § 240.10b-5, thereunder.

COUNT III

FRAUD IN VIOLATION OF
SECTIONS 17(a)(2) AND 17(a)(3) OF THE SECURITIES ACT

29. The Commission realleges and repeats its allegations set forth at paragraphs 1-22 of this Complaint as if fully set forth herein.

30. Since a date unknown but since at least March 1997 through October 2001, Giro, directly and indirectly, by use of the means or instruments of transportation or communication in interstate commerce and by the use of the mails, in the offer or sale of securities, has been: (a) obtaining money or property by means of untrue statements of material facts and omissions to state material facts necessary to make the statements made, in the light of the circumstances under which they were made, not misleading; and/or (b) engaging in transactions, practices and courses of business which have operated as a fraud or deceit upon purchasers.

31. By reason of the foregoing, Giro, directly and indirectly, has violated and, unless enjoined, will continue to violate Sections 17(a)(2) and 17(a)(3) of the Securities Act, 15 U.S.C. §§ 77(q)(a)(2) and 77(q)(a)(3).

COUNT IV

FRAUD IN VIOLATION OF
SECTIONS 206(1) OF THE ADVISERS ACT

32. The Commission realleges and repeats its allegations set forth at paragraphs 1-22 of this Complaint as if fully restated herein.

33. Since a date unknown but since at least March 1997 through October 2001, Giro, directly and indirectly, by use of the means or instruments of transportation or communication in interstate commerce and by the use of the mails, in the offer or sale of securities, as described herein, has been: (i) obtaining money or property by means of untrue statements of material facts and omissions to state material facts necessary to make the statements made, in the light of the circumstances under which they were made, not misleading; and (ii) engaging in transactions, practices and courses of business which have operated as a fraud or deceit upon clients.

34. By reason of the foregoing, Giro, directly and indirectly, has violated and, unless enjoined, may continue to violate Section 206(1) of the Advisers Act, 15 U.S.C. § 80b-6.

COUNT V

FRAUD IN VIOLATION OF
SECTIONS 206(2) OF THE ADVISERS ACT

35. The Commission realleges and repeats its allegations set forth at paragraphs 1-22 of this Complaint as if fully restated herein.

36. Since a date unknown but since at least March 1997 through October 2001, Giro, directly and indirectly, by use of the means and instrumentality of interstate commerce, and of the mails, and of any facility of any national securities exchange, in connection with the purchase or sale of the securities, as described herein, has been, knowingly, willfully or recklessly: (i) employing devices, schemes or artifices to defraud; (ii) making untrue statements of material facts and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (iii) engaging in acts, practices and courses of business which have operated as a fraud upon clients.

37. By reason of the foregoing, Giro, directly or indirectly, has violated and, unless enjoined, may continue to violate Section 206(2) of the Advisers Act, 15 U.S.C. § 80b-6.

COUNT VI

DEFENDANT GIRO AIDED AND ABETTED
GIRO INVESTMENTS' VIOLATION OF
SECTION 206(1) OF THE ADVISERS ACT

38. The Commission incorporates and realleges as if fully set forth herein the allegations of paragraphs 1-22 of this Complaint as if fully restated herein.

39. Since a date unknown but since at least March 1997 through October 2001, Giro knowingly, willfully or recklessly aided and abetted Giro Investments which, by use of the means or instruments of transportation or communication in interstate commerce and by the use of the mails, in the offer or sale of securities, as described herein, has defrauded its clients by: (i) obtaining money or property by means of untrue statements of material facts and omissions to state material facts necessary to make the statements made, in the light of the circumstances under which they were made, not misleading; and (ii) engaging in transactions, practices and courses of business which have operated as a fraud or deceit upon clients.

40. By virtue of the conduct described herein, Giro knowingly or recklessly provided substantial assistance to Giro Investments' violation of Section 206(1) of the Advisers Act, 15 U.S.C. § 80b-6.

COUNT VII

DEFENDANT GIRO AIDED AND ABETTED
GIRO INVESTMENTS' VIOLATION OF
SECTION 206(2) OF THE ADVISERS ACT

41. The Commission incorporates and realleges as if fully set forth herein the allegations of paragraphs 1-22 of this Complaint as if fully restated herein.

42. Since a date unknown but since at least March 1997 through October 2001, Giro knowingly, willfully or recklessly aided and abetted Giro Investments in defrauding its clients, which, by use of the means and instrumentality of interstate commerce, and of the mails, and of any facility of any national securities exchange, in connection with the purchase or sale of the securities, as described herein, has been, knowingly, willfully or recklessly: (i) employing devices, schemes or artifices to defraud; (ii) making untrue statements of material facts and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (iii) engaging in acts, practices and courses of business which have operated as a fraud upon clients.

43. By virtue of the conduct described herein, Defendant Giro knowingly or recklessly provided substantial assistance to Giro Investments' violation of Section 206(2) of the Advisers Act, 15 U.S.C. § 80b-6.

RELIEF REQUESTED

WHEREFORE, the Commission respectfully requests that the Court:

I.

Declaratory Relief

Declare, determine and find that Giro committed the violations of the federal securities laws alleged herein.

II.

Preliminary and Permanent Injunctive Relief

Issue a Preliminary Injunction and a Permanent Injunction, restraining and enjoining Giro and his agents, servants, employees, attorneys and all persons in active concert or participation with them, and each of them, from violating: (i) Section 17(a)(1) of the Securities Act, 15 U.S.C. § 77q(a); (ii) Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b) and Rule 10b-5, 17 C.F.R. § 240.10b-5; (iii) Sections 17(a)(2) and 17(a)(3) of the Securities Act, 15 U.S.C. §§ 77q(a)(2) and 77q(a)(3); (iv) Sections 206(1) and 206(2) of the Advisers Act, 15 U.S.C. § 80b-6; and (v) aiding and abetting violations of Sections 206(1) and 206(2) of the Advisers Act, 15 U.S.C. § 80b-6.

III.

Disgorgement

Issue an Order requiring Giro to disgorge all profits or proceeds that he received as a result of the acts and/or courses of conduct complained of herein, with prejudgment interest.

IV.

Penalties

Issue an Order directing Giro to pay a civil fine and/or money penalty pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d); Section 21(d) of the Exchange Act, 15 U.S.C. § 78(d)(3); and, Section 217 of the Advisers Act, 15 U.S.C. § 80b-17.

V.

Accounting

Issue an Order requiring an accounting by Giro and to provide the Commission with a document sworn to before a notary public setting forth all assets (whether real or personal) and accounts (including, but not limited to, bank accounts, savings accounts, securities or brokerage accounts, and deposits of any kind) in which he (whether solely or jointly), directly or indirectly (including through a corporation, trust or partnership), either has an interest or over which he has the power or right to exercise control.

VI.

Further Relief

Grant such other and further relief as may be necessary and appropriate.

VII.

Retention of Jurisdiction

Further, the Commission respectfully requests that the Court retain jurisdiction over this action in order to implement and carry out the terms of all orders and decrees that may hereby be entered, or to entertain any suitable application or motion by the Commission seeking additional relief within the jurisdiction of this Court.