U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17457 /April 4, 2002

SEC FILES ACTION FOR SECURITIES FRAUD
AGAINST JOAO P. SANTOS, A FORMER STOCKBROKER

Securities and Exchange Commission v. Joao P. Santos, et al. (United States District Court, E.D.Pa., Civil Action No. 02-CV-1836-AB)

The Securities and Exchange Commission ("Commission") announced today that it filed a civil injunctive action in the United States District Court for the Eastern District of Pennsylvania against Joao P. Santos, of Philadelphia, PA, and PinPoint Media, Inc. ("PinPoint") and Luxury Superstore, Inc., two companies owned and controlled by Santos, alleging that Santos fraudulently solicited and misappropriated more than $483,000 from investors.

The Commission's Complaint alleges that, from at least July 1999 through March 2001, Santos, a former stockbroker and convicted felon, engaged in a scheme to defraud four investors of more than $483,000. Santos, acting by and through the corporate defendants, made false and misleading statements to these individual investors in order to obtain their funds and convert them for his personal use.

The Complaint further alleges that Santos falsely promised prospective investors, who were located in Pennsylvania and New York, that he would invest their money in either the stock of publicly traded companies, or in his business, PinPoint. In fact, Santos never invested or used any of the investor funds as represented. Instead, he commingled all investor funds in one Luxury Superstore bank account, controlled solely by him, and spent the money on himself, including paying for personal credit card debts, cars, exotic vacations and expensive clothing.

Santos concealed the scheme and lulled the defrauded investors by giving them false assurances, including false account statements that purported to show their holdings in various well-known public companies. Santos told those investors who believed that they had invested in PinPoint that the company was doing well when, in fact, it was not.

The Complaint alleges that the defendants violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and seeks permanent injunctions, disgorgement together with prejudgment interest, and civil penalties from all defendants.

In a related matter, the Commission is also instituting public administrative proceedings against Santos. In those proceedings, the Commission alleges that on January 8, 2001, in the case of United States of America v. Joao Santos, Crim. No. 00-762, in the United States District Court for the Eastern District of Pennsylvania, Santos pled guilty to one count of mail fraud (18 U.S.C. 1341), and was subsequently sentenced to five years probation, fined $10,000 and ordered to make restitution of $12,890. The criminal information alleged that, between September 1998 and June 1999, while employed at First Liberty Investment Group, Inc., a broker-dealer registered with the Commission, Santos improperly diverted approximately $108,000 in customer funds and converted them for his personal use.

SEC Complaint in this matter.