Jean Janu

On December 5, 2003, the U.S. Attorney for the Central District of California announced that Jean Janu was charged with conspiracy to obstruct justice during an SEC enforcement investigation of Reed E. Slatkin and with taking steps to conceal Slatkin's plot to hide his Ponzi scheme from the SEC. From approximately 1986 until May 2001, Slatkin operated a massive Ponzi scheme in which he solicited more than $593 million from approximately 800 investors.

On May 11, 2001, the SEC obtained a temporary restraining order and asset freeze against Slatkin in federal district court in Los Angeles. The SEC alleged that Slatkin defrauded hundreds of clients through his unregistered investment advisory business located in Santa Barbara, California.

Janu, 56, formerly of Santa Fe, New Mexico, has agreed to plead guilty when she is arraigned in January to obstructing the SEC's investigation and to misprision of a felony for concealing Slatkin's scheme in an attempt to deceive the SEC regarding the authenticity of Slatkin's account statements.

In her plea agreement, Janu admitted that, at Slatkin's direction, she created and revised account statements and other documents that supported Slatkin's claim that he held over $500 million in securities in brokerage accounts at the fictitious entity "NAA Financial" of Zurich, Switzerland. Janu knew these documents were to be submitted to the SEC. Janu created these bogus statements on her computer and printed the NAA account statements on blank, European-sized stationary provided to her by Slatkin that contained NAA's name and purported Swiss address. Slatkin then instructed Janu to erase the account statements from her computer.

During the SEC investigation, Janu falsely testified under oath that she did not have any knowledge of any direct or indirect power held by Slatkin over any accounts in any kind of foreign financial institutions. In addition, Janu falsely testified that she had never heard the name NAA Financial.

On June 7, 2001, in the SEC's action, the U.S. District Court for the Central District of California entered a Judgment of Permanent Injunction against Reed E. Slatkin. Slatkin, without admitting or denying the allegations in the complaint, consented to the entry of the injunction from future violations of the federal securities laws. Slatkin has also been barred by the Commission from associating with any investment adviser.

On September 3, 2003, Judge Morrow sentenced Slatkin to 14 years in prison for his role in the massive Ponzi scheme. Slatkin pleaded guilty to 15 counts, including conspiracy to obstruct justice during an SEC enforcement investigation.

Additional information can be found in Litigation Release No. 16998 (May 11, 2001), No. 17033 (June 11, 2001), No. 17444 (March 27, 2002), No. 17796 (September 12, 2002), No. 17796 (October 22, 2002), No. 18107 (April 25, 2003), and No. 18323 (September 4, 2003) and Advisers Act Release No. 2006 (January 2, 2002).