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Investment banker Galanis pleads guilty in Gerova stock scam

An investment banker once dubbed "Porn's New King" and accused of engineering a scheme with his father and two brothers to reap illegal profits by manipulating a reinsurer's stock price pleaded guilty to fraud charges on Thursday.

Jason Galanis, 46, of Los Angeles, admitted to securities fraud, investment adviser fraud, and two conspiracy charges at a hearing before U.S. Magistrate Judge Sarah Netburn in Manhattan.

Under a plea deal, Galanis agreed not to appeal any prison term of 12-1/2 years or fewer, and agreed to forfeit nearly $37.6 million plus two properties. His sentencing is scheduled for Dec. 9.

Galanis' plea came one day after his father John pleaded guilty to related securities fraud and conspiracy charges concerning the reinsurer, Gerova Financial Group Ltd.

Two brothers, Jared...