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SEC Lawsuit Alleges Fraud by Associate of Swindler Wymer

February 08, 1995|MARK LANDSBAUM | TIMES STAFF WRITER

LOS ANGELES — The Securities and Exchange Commission filed a civil action Tuesday against Daniel Lee Osborn, a business associate of convicted swindler Steve D. Wymer, alleging that Osborn schemed to defraud investors while operating DLO Securities, formerly located in Irvine.

In an action filed in U.S. District Court, the commission seeks a permanent injunction to prohibit Osborn from future violations of the securities law and to recover all "ill-gotten gains derived from Osborn's unlawful activity."

Osborn could not be reached for comment.

"Osborn participated in a fraudulent scheme with Steven D. Wymer and the investment advisers controlled by Wymer, Denman & Co. and Institutional Treasury Management Inc." in 1989 and 1990, the court action alleged.

Wymer pleaded guilty in 1992 to engineering a massive fraud involving small government agencies in what federal authorities termed "one of the most significant and financially devastating" cases of its kind. He is serving a prison sentence of 14 years, seven months.

Wymer, who managed $1.2 billion through his Newport Beach investment company, also was ordered to pay $209 million in restitution.

SEC officials alleged Monday that Osborn, through his broker-dealer DLO Securities Inc., charged ITM clients fraudulent, excessive, undisclosed markups on U.S. government securities totaling $319,613. Osborn paid Wymer a portion of the fraudulent profits, officials said.

Osborn is accused of charging ITM itself fraudulent, excessive markups of $47,196.

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