Steven Palladino, et al.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22694 / May 1, 2013

Securities and Exchange Commission v. Steven Palladino, et al., Civil Action No. 13-11024-DPW

Commission Obtains Temporary Restraining Order and Asset Freeze Against Massachusetts Man Who Defrauded Investors of At Least $5.5 Million

The Securities and Exchange Commission announced today that, on April 30, 2013, it filed an emergency enforcement action in federal district court in Massachusetts and obtained a temporary restraining order, asset freeze, and other emergency relief against Steven Palladino, of West Roxbury, Massachusetts and his Massachusetts-based company Viking Financial Group, Inc. The Commission's Complaint alleges that, since at least April 2011, Palladino and Viking made material misrepresentations in raising at least $5.5 million in investment funds from approximately 30 investors. The Commission alleges that Palladino and Viking falsely promised investors that their money would be used to conduct the business of Viking, which was to make to short-term, high interest loans to developers and small businesses unable to obtain traditional financing loans. The Complaint further alleges that Palladino falsely told investors that the loans made by Viking would be secured by first interest liens on non-primary residence properties and misrepresented that investors would be paid back their principal, plus monthly interest at rates generally ranging from 7-15%, from payments made by borrowers on the loans. According to the Complaint, however, the Defendants made very few real loans to borrowers, and instead used investors' funds largely to make payments to earlier investors and to pay for the Palladino family's substantial personal expenses, including cash withdrawals and hundreds of thousands of dollars spent on gambling excursions, vacations, luxury vehicles, and tuition.

The Commission's Complaint alleges that the Defendants' conduct violates Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. The Honorable Douglas P. Woodlock issued a temporary restraining order, prohibiting the Defendants from directly or indirectly continuing to violate the foregoing statutory provisions, and an order freezing the Defendants' assets. The Court's order further provides that the Defendants are prohibited from soliciting or accepting additional investor funds and from altering or destroying any relevant documents. In its action, the Commission seeks the entry of a preliminary injunction against the Defendants upon the expiration of the temporary restraining order, the entry of permanent injunctions, disgorgement of ill-gotten gains plus pre-judgment interest thereon, and the imposition of civil monetary penalties. A hearing in the case is set for May 3, 2013.

The Commission acknowledges the assistance of Suffolk County (Massachusetts) District Attorney Daniel F. Conley's Office, which filed related criminal charges against Steven Palladino and Viking in March 2013.

SEC Complaint