Jason Galanis Gets 11+ Years for Gerova Stock Scam

Jason Galanis was sentenced to 135 months in federal prison for masterminding a sprawling securities fraud scheme that looted tens of millions from Gerova Financial Group, Ltd. — a publicly traded New York Stock Exchange company — and defrauded investors and advisory clients alike. The Southern District of New York, led by U.S. Attorney Preet Bharara, announced the sentence as the final blow in a years-long prosecution rooted in market manipulation, hidden stock control, and deliberate regulatory evasion.

Galanis, who pled guilty on July 21, 2016, admitted to two counts of conspiracy to commit securities fraud, one count of securities fraud, and one count of investment adviser fraud. Sentenced by U.S. District Judge P. Kevin Castel, the case exposed how Galanis, from 2009 to 2011, used layers of nominees and offshore deception to control Gerova stock while remaining hidden from public disclosure. He skirted an SEC-imposed bar that prohibited him from serving as an officer or director of any publicly traded firm, all while pulling the strings from behind the scenes.

Central to the fraud was Ymer Shahini, a foreign nominee who held over five million shares of Gerova stock — nearly half the company’s public float — on Galanis’s behalf. The shares were issued under false pretenses and funneled through Shahini to conceal Galanis’s ownership. Gary Hirst, John Galanis, Derek Galanis, and Gavin Hamels were named co-conspirators who helped orchestrate the scheme, including opening brokerage accounts in Shahini’s name to sell the stock and hide millions in proceeds from regulators and investors.

Galanis didn’t stop at stock manipulation. He also bribed investment advisers, including Hamels, to buy Gerova shares in client portfolios by offering secret compensation. These coordinated purchases were timed to prop up the stock price through match trading — artificial trades designed to mislead the market while Galanis and his network dumped massive blocks of stock from the Shahini Accounts at inflated values.

“As he previously admitted in his guilty plea, Jason Galanis swindled the shareholders and clients of Gerova Financial and Tag Virgin Islands out of tens of millions of dollars in a massive fraud scheme,” said Bharara. “Today, he was sentenced to a lengthy prison term for his participation in these fraud schemes.” The U.S. Attorney’s office emphasized that the deception struck at the core of market integrity, exploiting loopholes and complicit actors to bleed value from unsuspecting investors.

The sentence marks a rare federal crackdown on shadow control of public companies through nominee fraud and offshore obfuscation. Authorities say the Gerova scheme exemplifies how white-collar criminals exploit weak disclosure enforcement and offshore anonymity. With 135 months behind bars, Jason Galanis now faces the cost of betting everything on deception — and losing it all.