Steven John Meyer, of Staten Island, New York, a stockbroker formerly registered with Legend Securities, Inc., was fined $100,000.00 and suspended from acting as a broker-dealer in any capacity in The State of New Hampshire pursuant to a New Hampshire Bureau of Securities Regulation Order founded upon allegations against Meyer including, inter alia: the failure to honor instructions from customers, engaging in telemarking in a prohibited manner, conducting business activities in an unethical fashion, providing bogus confirmations to customers, and effecting unsuitable and excessive equity trades in customer accounts. In the Matter of Legend Securities Inc. and Steven Meyer, No. INV15-00019 (Nov. 30, 2016)
According to the Order, Meyer had complete authority to manage three customer accounts that were subject of sales practice violations that occurred between September of 2013 and January of 2016. Particularly, Meyer was alleged to have cold called a customer and engaged in high pressure sales strategies to solicit the customer’s investments in risky equity transactions. Apparently, Meyer traded in the customer’s account on an excessive basis, leading the customer to sustain substantial losses. The Order stated that the customer’s transactions were not accurately marked by Meyer to confirm that he solicited them, which enabled Meyer to conceal the fact that he made the investment recommendations to the customer.
In one case, a customer from New Hampshire was reportedly contacted by Meyer despite having been on a do-not-call registry, wherein the customer was urged by Meyer to invest in stocks that Meyer selected, including: Mobileye; Planar Systems Inc.; Opko Health Inc.; Depomed Inc; and Cytrx. The Order revealed that Meyer was responsible for making all recommendations and decisions to purchase or sell securities in the account of the customer who was described as unsophisticated and inexperienced with making investments. Meyer purportedly pressured the customer to effect trades on select days by claiming that the customer would otherwise miss out on favorable stock prices. Apparently, the customer moved to liquidate his investment account with Meyer after sustaining losses; however, the customer’s account was not liquidated until several months after making the request. The Order stated that the customer sustained $15,950.74 in investment losses by August of 2015 – the point in which trading ceased.
The Order further revealed that another customer from New Hampshire who lacked investment experience was contacted by Meyer in March of 2015, wherein the customer was pressured by Meyer to invest in securities including, inter alia: NQ Mobile; Pilgrims Pride; Cytrx; Spherix Inc.; and Twitter. Meyer purportedly traded equities excessively in the customer’s account without the customer’s knowledge. The customer apparently sustained $30,000.00 in investment losses as a result. The Order indicated that Legend Securities was contacted in July of 2015 to close the customer’s account; however, the customer’s request was not acted upon.
The State of New Hampshire Bureau of Securities Regulation concluded that the firm’s and Meyer’s conduct was violative of Financial Industry Regulatory Authority (FINRA) Rules 2111, 3110, 3230, and 2232 as well as New Hampshire Revised Statutes Annotated 421-B:10, 421-B:8, and 421-B:3-a.
FINRA Public Disclosure reveals that Meyer has been identified in two customer initiated investment related disputes containing allegations of his misconduct while employed with Legend Securities, Inc. Specifically, on April 10, 2015, a customer filed an investment related arbitration claim involving Meyer’s conduct, wherein the customer requested $150,000.00 in damages based upon allegations that Meyer, while not having been licensed to conduct securities business in The State of Florida, utilized the customer’s margin account in an improper manner, manipulated stock prices, churned the customer’s account, neglected to abide by the customer’s investment instructions, effected transactions without consent, and falsified statements in reference to the customer’s over-the-counter equity transactions.
Subsequently, on December 5, 2016, a customer was awarded $38,909.82 in damages according to an investment related arbitration claim regarding Meyer’s activities, based upon allegations that Meyer violated the Uniform Securities Act of The State of Michigan, negligently managed the customer’s portfolio, effected stock transactions that were not suitable for the customer, and committed fraud.
Meyer’s registration with Legend Securities, Inc., was terminated on October 12, 2016. Subsequently, he was associated with Chelsea Financial Services from October 12, 2016, to March 16, 2017. Legend Securities, Inc. was later expelled from FINRA membership on April 17, 2017.
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