On February 6, a jury in the United States District Court for the Middle District of Florida found the CEO of the now-defunct Radius Capital Corp., Robert A. DiGiorgio, knowingly or recklessly made false or misleading statements to Ginnie Mae and the investing public in connection with US$23 million in MBS Radius issued in 2005 and 2006. The Securities and Exchange Commission, which brought the case, alleged that Radius and DiGiorgio violated federal securities laws and fraudulently induced Ginnie Mae to guarantee the bonds by representing that the underlying loans were or would be insured by the Federal Housing Administration (FHA), when in fact the majority of the loans were ineligible. The suit alleged Radius employees routinely ignored FHA underwriting standards at DiGiorgio's direction. In its verdict, the jury determined that Mr. DiGiorgio violated Sections 17(a)(1), (2), and (3) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rules 10b-5(a), (b), and (c) promulgated thereunder. Verdict.
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