Former Doral exec charged in $4bn securities fraud

The former treasurer of Doral Financial has been accused of a scheme to defraud investors in the stock of the Puerto-Rico based firm.

Mario Levis is charged with one count of securities fraud and three counts of wire fraud. If convicted, he faces a maximum penalty of 20 years on each count.

According to the indictment, the scheme, which occurred between 2001 and 2005, involved the fraudulent reporting of certain core assets of Doral in order to artificially inflate the market price of stock.

“By the time Levis resigned from Doral in late August 2005, the price of Doral’s shares had fallen to approximately 70%.

An aggregate decline in shareholder value of approximately $4bn followed the unraveling of the scheme.

During this time frame, Levis and other members of his family were substantial holders of Doral securities. His family’s stock holdings were worth approximately $450m at their height.

By the time Levis resigned from Doral in late August 2005, the price of Doral’s shares had fallen to approximately 70%.