FINRA Asserts Claims against Meyers Associates Brokers for Alleged FraudFriday, April 17, 2015
According to a FINRA Complaint, between May 15, 2012 and May 24, 2012, George Johnson manipulated the market for the common stock IceWEB, Inc. (OTCBB: IWEB) by soliciting certain customers to buy, while soliciting other customers to sell, IWEB stock at increasingly higher and artificially inflated prices, frequently effecting matched orders among his own customers. Between February and May 2012, Johnson and Christopher Wynne, who was Johnson’s supervisor at Meyers Associates, L.P. sent Meyers’ customers third party research and sales materials concerning IWEB that were riddled with misleading, exaggerated and unsupported claims and failed to disclose material information.
Johnson also allegedly solicited customers to purchase shares of Snap Interactive, Inc. stock (OTCBB: STVI) between July 18, 2012 and August 31, 2012 while failing to disclose that he was simultaneously selling his and his wife’s personal holdings of STVI. Johnson allegedly disclosed to his customers confidential material nonpublic information concerning a prospective offering of shares of ChromaDex Corp. stock (OTCBB: CDXC) without the requisite permission from his firm and without an agreement from the customer to keep the information confidential and refrain from trading shares of CDXC until the information had been disclosed publicly.
According to the FINRA complaint, Johnson, Wynne and Joseph Mahalick, who worked with Johnson and Wynne at Meyers, intentionally misidentified the broker of record on five account applications and over 100 order memoranda submitted to Meyers in a surreptitious attempt to cover up Johnson’s violations of state registration requirements. Meyers and Wynne failed to supervise the Firm’s Chicago Branch Office in general, and Johnson in particular, by failing to review electronic correspondence, failing to supervise Johnson’s IWEB and STVI trades, and by failing to supervise the dissemination of sales literature and research. From at least November 17, 2011 through at least November 30, 2012, Meyers failed to establish and implement Anti-Money Laundering policies and procedures reasonably expected to detect and cause the reporting, if appropriate, of potentially suspicious activity relating to the manipulative trading of securities.
Investors who lost money due to Johnson, Wynne or Mahalick’s misconduct may be able to recover their losses from them or their brokerage firm, Meyers Associates. Oftentimes brokerage firms can be held accountable when they fail to supervise a broker who is committing fraud upon the investing public. If you invested and lost money due to bad advice or broker misconduct, please give us a call at 1-877-410-8172. Since 1998, the experienced attorneys at ChapmanAlbin have been fighting for victims of investment fraud and broker misconduct. Call today for a free consultation. Callers will speak directly to an attorney who will fight for them.