Brian Joseph Mulkeen of Monroe New York a stockbroker currently registered with TFS Securities Inc. is the subject of a Consent Order issued by Massachusetts Securities Division which required that he be placed on heightened supervision at TFS Securities Inc. as a condition of registering with the state based upon findings that Mulkeen was subject of at least three regulatory infractions which alleged in part that Mulkeen failed to supervise brokers. Order No. R-2017-0051 (June 19, 2017).
Mulkeen has been barred by Securities and Exchange Commission (SEC) from any having supervisory responsibility over, inter alia, any broker or investment adviser according to an Order Instituting Administrative and Cease-And-Desist Proceedings, pursuant to Securities Exchange Act of 1934 Section 15(b) and 21C, Securities Act of 1933 Section 8A, and Investment Company Act of 1940 Section 9(b), Making Findings, and Imposing Remedial Sanctions. In the Matter of Brian J. Mulkeen et al. Administrative Proceeding File No. 3-16875 (Sept. 30, 2015).
According to the SEC’s Order, Mulkeen failed to supervise the former owner of All Funds Inc., Edward Borg – a former broker dealer, who engaged in market manipulation of Natural Alternatives International Inc. (NAII) stock.. Apparently, manipulative trades had been effected by Borg so that NAII’s price could be sustained. SEC found that Borg falsified the amount of interest in NAII on the market.
Borg reportedly made matched and cross trades in NAII. Apparently, Borg often controlled the prices for NAII because he traded in customers’ accounts. This apparently disrupted NAII’s trading volume, causing the stock to come off as having more liquidity than the stock had.
Evidently, Borg placed a number of customers’ assets in NAII. Borg reportedly over-concentrated the accounts by placing in excess of ninety percent of the customers assets in the company. SEC found that it was unsuitable for Borg to have made investment recommendations to an All Funds customer given the customer’s objectives for investing.
The Order further detailed that over twenty-two percent of NAII had been owned by Borg. Additionally, Borg’s transactions caused customers to own 32% of the company . None of Borg’s holdings in NAII were accurately stated by him when submitting required federal securities filings.
Evidently, Mulkeen’s lack of supervision enabled Mulkeen’s misconduct to persist. Mulkeen reportedly failed to engage in any meaningful supervisory activities. Rather, all of Borg’s personal trades had been reviewed and authorized by Mulkeen. This also included trades that Mulkeen effected in the accounts of All Funds customers.
The Order stated that there were obvious concerns about Borg’s trading activities, including washed trades, which should have prompted Mulkeen to address the concerns. Mulkeen supposedly even neglected to address the suitability of Borg’s trades in the account of a customer whose account contained an excessive allocation of NAII. Moreover, Mulkeen apparently knew about Borg having been the owner of a larger portion of NAII that Borg claimed; however, Mulkeen failed to follow up on Borg’s failure to file reports evidencing ownership. Ultimately, SEC found Mulkeen’s conduct violative of Securities Exchange Act of 1934 Sections 15(b)(4)(E) and 15(b)(6).
Mulkeen has been employed by TFS Securities Inc. since February 16, 2017.
