The Securities and Exchange Commission filed today a civil injunctive action in federal district court in San Francisco against David "Scott" Cacchione, a former Managing Director at San Francisco-based brokerage firm Merriman Curhan Ford & Co. ("Merriman"), alleging that he helped a friend bilk banks and private lenders out of approximately $45 million in 2007 and 2008. The SEC alleges that Cacchione provided Silicon Valley venture capitalist William J. "Boots" Del Biaggio III with Merriman customer account statements, which Del Biaggio doctored and used as collateral to obtain fraudulent loans. In the action, the SEC also charged Cacchione with defrauding his own customers by purchasing risky penny stocks in their accounts without their permission.

— U.S. Securities and Exchange Commission

Thanks to reader Todd for the heads up. For the curious, here's a link to the actual complaint (.pdf).

There's some pretty interesting stuff in there. Todd writes that "Cacchione has already accepted a bar from the industry, meaning that even before he was officially charged he agreed to settle with the SEC. Total fines have yet to be determined, but the fact that he's not fighting it must mean the SEC really has the goods on him."

The complaint details the allegations as to how Cacchione became involved in Boots's bid to buy the Preds. To start, the two were friends and business associates, and when Cacchione ran into financial problems, Del Biaggio lent him more than $2-million "to save his home from foreclosure."

In August of 2007, unable to obtain loans to get the $25-million for the NHL club, Boots allegedly "asked Cacchione to help him make it appear that [he] had ample collateral for the loans he was seeking to help him inflate his net worth on his NHL application."

The pair then found one of Cacchione's customers who had an account statement that "reflected nearly $19-million in assets," doctored it and sent it off to the NHL.

Ultimately, it's alleged that Del Biaggio obtained $45-million using these methods. The complaint has several other allegations against Cacchione with regards to his work with the Merriman firm.

Ugly stuff.