United States : FINRA Expels Hallmark Investments, Inc. and Bars CEO for Fraud.
The Financial Industry Regulatory Authority (FINRA) announced today that it has expelled New York-based Hallmark Investments, Inc. and barred its Chief Executive Officer, Steven G. Dash, in connection with a scheme to sell shares of stock to customers at fraudulently inflated prices. FINRA also suspended Hallmark representative Stephen P. Zipkin for two years and required him to pay more than $18,000 in restitution to affected customers.
FINRA found that Hallmark, Dash and Zipkin used an outside brokerage firm, manipulative trading, and misleading trade confirmations to sell nearly 40,000 shares of stock that the firm owned to 14 customers at fraudulently inflated prices. At Dashs direction, Hallmark used a pre-arranged trading scheme to sell these shares to the customers at $3.00 per share. At the time, the public offering price for Avalanche shares was just $2.05 per share, and Hallmark sold Avalanche shares to other customers at prices as low as 80 cents. Hallmark, Dash and Zipkin never disclosed to the customers that the shares they were purchasing belonged to Hallmark, the firm was charging extraordinary mark-ups on the transactions, the firm was selling Avalanche shares to other customers during the same period at much lower prices, or that the shares could be purchased for substantially less on the open market.
Susan Schroeder, FINRA Executive Vice President and Head of Enforcement, said, This case highlights FINRAs persistent focus on high-risk conduct that causes investor harm. We will continue to pursue firms and individuals engaging in fraudulent activity.
In addition, Hallmark and Dash were charged with failing to respond to numerous requests for documents and information from FINRA. FINRA also found that Hallmark failed to maintain the required minimum net capital.
In settling this matter, Hallmark Investments, Inc., Dash, and Zipkin neither admitted nor denied the charges, but consented to the entry of FINRAs findings.
Investors can obtain more information about, and the disciplinary record of, any FINRA-registered broker or brokerage firm by using FINRA's BrokerCheck or by calling (800) 289-9999. In 2016, members of the public used this free service to conduct 111 million reviews of broker or firm records. Investors can also call FINRA's Securities Helpline for Seniors at (844) 57-HELPS for assistance with concerns or questions about their brokerage accounts and investments.
FINRA is dedicated to investor protection and market integrity. It regulates one critical part of the securities industry brokerage firms doing business with the public in the United States. FINRA, overseen by the SEC, writes rules, examines for and enforces compliance with FINRA rules and federal securities laws, registers broker-dealer personnel and offers them education and training, and informs the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers a dispute resolution forum for investors and brokerage firms and their registered employees.
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|Date:||Aug 16, 2017|
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