Ex-Gerova chairman gets 6-1/2 years prison over stock scam

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The former president and chairman of the board of Gerova Financial Group has been sentenced to 6 1/2 years in prison for allegedly defrauding the shareholders of the company.

Gary Hirst, 64, was accused of giving away nearly $72 million of company stock to himself and his co-conspirators for no legitimate business purpose, according to the U.S. Attorney’s Office for the Southern District of New York. He was convicted last September.

Hirst was one of seven people charged over a scheme at Gerova that prosecutors said ran from 2009 to 2011.

One of the other defendants was Jason Galanis, a former Los Angeles investment banker once dubbed “Porn’s New King” by Forbes magazine after he had bought a credit card payment processor for internet pornography.

Prosecutors said the Gerova scheme involved a plan to quietly take control of nearly half of the reinsurer’s public float, and cash out profitably after bribing investment advisers to buy shares for their own clients.

The scheme generated nearly $20 million of illegal profit, including $2.62 million for Hirst, prosecutors said.

Read more here: wkzo.com

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