1st Discount Brokerage and Mark Miller— Facilitating Customer Liquidations
1st 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 Carr & Kane Investment Recovery Lawyers Often Represent Investors
The Peiffer Wolf Carr & Kane 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 Carr & Kane, Jason Kane or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at (585) 310-5140.