Manhattan Federal Court has handed down a six-year prison sentence to father and son duo John Galanis and Derek Galanis for their role in a multi-million dollar market manipulation scheme.
Their scheme targeted Gerova Financial Group, Ltd. (“Gerova”), a publicly traded company listed on the New York Stock Exchange. According to U.S. Attorney Preet Bharara, the Galanises conspired to issue over $70 million worth of stock while hiding their true ownership from shareholders and investors.
John Galanis and Derek Galanis, who both pleaded guilty to conspiracy to commit securities fraud and securities fraud, were sentenced by United States District Judge P. Kevin Castel.
Their co-conspirators included Jason Galanis, Gary Hirst, Ymer Shahini, and Gavin Hamels. Jason Galanis obtained control over Gerova without revealing his role as a director or officer, using Ymer Shahini as a foreign nominee to disguise ownership interests. Derek Galanis was instrumental in recruiting Shahini for the scheme.
Their plot involved managing brokerage accounts under Shahini’s name, selling Gerova stock, and concealing proceeds to hide Jason Galanis’s ownership. They also manipulated the market by coordinating purchases with investment advisers who were offered benefits in return for purchasing Gerova stock.
Today’s sentence marks a significant victory for justice and investor protection, as the Galanises are held accountable for their deceptive practices that undermine trust in the financial markets.
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Key Facts
- State: New York
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes|White Collar Crime
- Source: Official Source ↗
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