[ by Howard Haykin ] The SEC on Tuesday charged 2 former Miami brokers with fraud for overcharging customers about $36 million in hidden markup fees on structured notes transactions.  The pair, while working at LatAm Investments LLC, a broker-dealer that is no longer in business, defrauded 2 Brazilian public pension funds and a Colombian institutional investor that purchased from LatAm the structured notes issued by major commercial banks. Backgrounds of Respondents. Fabrizio Neves, 43, is a Brazilian citizen and resident, and maintains a residence in Miami, FL.  From May 2006 until November 2009, he was a part-owner of, and a registered rep associated with, LatAm Investments.  Neves originally purchased a 1% stake in LatAm for $350K, though he intended to acquire a 75% interest.  Neves also owns 90% of Atlantica Administradora De Recursos Ltda., a/k/a Atlantica Investimentos ("Atlantica Asset Management"), a non-registered, Brazilian-based portfolio management company.  Neves held Series 7 and 66 securities licenses.  In May 2010, Neves agreed to be barred from the industry to settle FINRA charges related to the markup scheme - including his failure to provide requested documents in connection with FINRA's investigation. Jose Luna, 45, resides in Aventura, FL.  In May 2006, Neves hired Luna to join LatAm as a back office operations employee.  At the time, Luna possesses a Series 11 (Assistant Rep- Order Processing) License, which he obtained in 2004.  In May 2008, Luna obtained his Series 7 license and subsequently worked as Operations Manager at LatAm, assisting Neves in trading on behalf of the two Brazilian funds, until he left in December 2009. SEC Findings and Allegations. From 2006 to 2009, Fabrizio Neves negotiated with several U.S. and European commercial banks to structure 12 notes on his customers' behalf.  But instead of purchasing the notes for his customers' accounts for prices around the banks' issuance amounts - totaling around $70 million - Neves, in most transactions, is alleged to have first traded the notes with one or more accounts in the name of offshore nominee entities that he and Jose Luna controlled.  Neves then sold the notes to his customers with undisclosed markups that ran as high as 67%.  The SEC say that Neves had no reasonable basis to mark up the prices that significantly.  As a result of the alleged markup scheme, the Brazilian funds overpaid by $24 million, while the Colombian institutional investor overpaid by $12 million. As a result of the inflated markups on the structured note transactions, LatAm paid Neves millions of dollars in inflated sales commissions.  Luna was paid hundreds of thousands of dollars in inflated salary and commissions from LatAm and tens of thousands of dollars in additional compensation from a company that Neves controlled. To conceal the excessive markups ... Neves directed Luna to alter the banks' structured note term sheets in half of the transactions - either whiting out or electronically cutting and pasting the markup amounts over the actual price and trade information.  The altered documents were then sent to the customers.  Neves and Luna further concealed the excessive markup for most of the transactions by first purchasing the notes into accounts in the name of nominee entities they controlled in the British Virgin Islands. Angelica Aguilera, LatAm's former president ..., who was the direct supervisor over Neves and Luna, was named in an SEC administrative proceeding.  She was charged with failing to reasonably supervise Neves and Luna, and to effectively follow or implement LatAm's supervisory pols and procedures to ensure the fairness of markups and markdowns that they charged.  This enabled the pair to carry out the fraud undetected. Intended SEC Sanctions. The SEC seeks to disgorge Fabrizio Neves of ill-gotten gains, affix financial penalties, and enjoin Neves from future violations of the federal securities laws. Jose Luna settled SEC charges by agreeing to pay $924K in disgorgement, and prejudgment interest of $242K.  A monetary penalty has yet to be determined.  Luna is further barred from the industry. SEC Miami Regional Office Staff Credits.   Investigation by Senior Counsel Laura Smith and Senior Reg'l Accountant Fernando Torres, and supervised by Assistant Reg'l Director Jason Berkowitz.  Senior Trial Counsel Edward McCutcheon will lead the litigation. For further details, go to:  [SEC PR 12-168, 8/29/12] and [SEC Admin Proceeding - Aguilera] and   [SEC Complaint -Neves and Luna].