1st Discount Brokerage and Mark Miller— Facilitating Customer Liquidations

stockbroker fraud attorneys1st Discount Brokerage and Mark Miller Allegedly Liquidated Low-priced Securities and Wired Sale Proceeds to Outside Account without Re-investment

1st Discount Brokerage and Mark Miller allegedly facilitated, between December 2009 and July 2010, customer liquidations of approximately 7,764,600 shares from nine different issuers, eight of which eight were low-priced shares of securities, according to a recent FINRA Letter of Acceptance, Waiver and Consent (AWC).

Said issuers were, the AWC further alleges, Bergamo Acquisition Corp. (”BGMO”), China Insoline Corp. (“CHIO”), Emeritus Corporation (”ESC”), Neah Power Systems, Inc. (”NPWZ”), Sanswire Corporation (“SNSR”), Searchlight Minerals Corp. (**SRCH”), VU1 Corporation (“VUOC”), Befut International Co. Ltd. (“BFTI”), and Naccl Energy Corp. (“NCEN”).

During the relevant time period, ESC shares were allegedly traded on the New York Stock Exchange, whilst BGMO, CHIO, NPWZ, SNSR, SRCH, VUOC, BFTI, and NCEN shares were traded on either OTC pink sheets or the OTC bulletin board, according to the AWC.

Sales of All Shares in the Argyll Accounts Allegedly Generated Net Proceeds of $2,754,512.68 and total commissions of $63,348.75

1st Discount customers and Argyll Investments allegedly engaged in a pattern of depositing large blocks of low-priced securities in their accounts, of liquidating the low-priced securities and wiring the sale proceeds to an account outside 1st Discount without re-investing said fund, according to the AWC.

Furthermore, during the relevant time period, 1st Discount‘s Anti-Money Laundering Compliance Program was also allegedly deficient in monitoring for potentially suspicious activity related to the deposit and liquidation of low-priced securities, and failed to set up a proper anti-money laundering policies and procedures, the AWC further alleges.

In addition, 1st Discount failed to provide adequate training related to the risks posed by the deposit and liquidation of low-priced securities, and thus violated FINRA and NASD Rules, according to the AWC. As a result, 1st Discount has been censured and fined $60,000, and Miller has been suspended one month and fined $10,000.

The Peiffer Wolf Investment Recovery Lawyers Often Represent Investors

The Peiffer Wolf investment recovery lawyers often represent investors who lose money as a result of broker misconduct. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Investors who believe they lost money as a result of broker misconduct may contact the investment recovery lawyers at Peiffer Wolf, Jason Kane or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 585-310-5140.

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In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.