Howard Joseph Allen III of New York New York a stockbroker currently registered with Portfolio Advisors Alliance LLC is the subject of a Securities and Exchange Commission (SEC) Order Instituting Administrative Proceedings Pursuant to Securities Exchange Act of 1934 Section 15(b) regarding sanctions SEC may impose based upon Allen committing securities fraud. In the Matter of Howard J. Allen III Administrative Proceeding File No. 3-19577 (Oct. 7, 2019).
Allen was charged by SEC in a Complaint alleging that when he was associated with Portfolio Advisors Alliance, he provided fake information to investors who purchased American Growth Funding (AGF) II securities through a private placement. Securities and Exchange Commission v. Howard J. Allen III et al. No. 1:16-cv-00828 (Feb. 3, 2016).
According to the Complaint, investors had been promised twelve percent annual returns for investing in AGF, which was in the business of loaning businesses funds which were generated from investors. Misrepresentations had allegedly been made about the company’s management as well as the bleak loan values which could detriment the returns that AGF II could deliver to investors. Also, the offering documents utilized by Allen allegedly falsely conveyed that there had been an audit of the financial statements of AGF II and that the company would be subject of another audit at the end of each of AGF II’s fiscal years.
The SEC alleged that Allen learned about the false information conveyed within AGF II offering documents, but he persisted in disseminating those offering documents to investors in an effort to generate securities sales. The Complaint stated that there was no point in which investors were made aware from Allen that the offering documents he provided were bogus.
Allen was found by a jury to have engaged in conduct violative of Securities Exchange Act of 1934 Sections 10(b), Securities Act of 1933 Section 17(a), and SEC Rule 10b-5. The jury also found that Allen controlled Portfolio Advisors Alliance LLC and was liable for the securities broker dealer’s violations of Securities Exchange Act of 1934 Section 10(b) and Rule 10b-5. In addition, the jury found that Allen aided AGF, its principal, Ralph C. Johnson, and Portfolio Advisors Alliance’s violations of federal securities laws.
FINRA Public Disclosure reveals that Allen has been subject of at least four other regulatory actions concerning his misconduct. In particular, Allen has been fined $10,000.00 and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity according to a Decision containing findings that Allen sold away during the time that he was associated with Portfolio Advisors Alliance Inc. and J.P. Turner Company. Department of Enforcement v. Howard J. Allen III Disciplinary Proceeding No. 2010022586201. Allen took part in twelve private securities transactions for compensation without telling the securities broker dealers; conduct violative of FINRA Rules 2010 and National Association of Securities Dealers (NASD) Conduct Rules 2110 and 3040.
FINRA Public Disclosure additionally reveals that Allen has been identified in five additional customer initiated investment related disputes containing allegations of his misconduct while employed with Sands Brothers Co. Ltd. In fact, Allen was subject of a customer initiated investment related arbitration claim in which the customer was awarded $551,135.00 in damages according Allen being liable on the customer’s causes of action including unauthorized trading and churning of the customer’s investment account. Another customer initiated investment related complaint concerning Allen’s conduct was resolved for $100,000.00 in damages supported by accusations that Advanced Fibre Communications shares had been purchased for the customer’s account without authorization being provided to the stockbroker.
