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Meyers Associates, L.P., a FINRA member since 1994 headquartered in New York, NY, engages in general securities business via 70 registered reps operating out of 12 branch offices. The firm, along with George Johnson (investment banking representative), Christopher Wynne (general securities principal), and Mahalick (general securities and investment banking representative), were charged by FINRA’s Department of Enforcement in a Complaint alleging willful securities fraud via market manipulation; fraudulent omissions of material conflicts of interest concerning purchases/sales of a security; distribution of false sales and research materials; unauthorized disclosure of non-public and confidential material information regarding a securities offering; falsifying firm records; supervisory failures; and failure to establish/implement anti-money laundering procedures and policies. Department of Enforcement v. Johnson et al., No. 2013035533701 (Apr. 8, 2014).
According to the Complaint, between May 15 of 2012 and May 24 of 2012, George Johnson had manipulated the market for IceWeb, Inc. (“IWEB”) via solicitation of customers to purchase and sell IWEB stock at artificially inflated prices, where he would commonly match orders between his client base. FINRA alleged that Johnson had willfully violated Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5, and FINRA Rules 2010 and 2020.
The Complaint further indicated that from February-May of 2012, Johnson and Christopher Wynne (Johnson’s supervisor at Meyer) sent Meyers’ clients sales and research materials regarding IWEB that contained significant amounts of exaggerated, misleading, and otherwise unsupported claims while additionally failing to disclose material details.
FINRA also alleged that Johnson had violated Section 10(b) of the Exchange Act and Rule 10b-5 by way of soliciting investors to purchase shares of a company called Snap Interactive, Inc. while at the same time, acting reckless or willful in not disclosing conflicts of interest to investors specifically concerning plans to sell his spouse’s and his personal holdings of the same company.
The Complaint stated that Johnson had disclosed nonpublic information regarding ChromaDex Corp. stock to a customer without gaining permission to do so from his firm, and where he had additionally failed to enter into an agreement with the customer to keep the nonpublic information confidential and to avoid the trading shares until which time the ChromaDex Corp. stock would be disclosed to the public.
The Complaint further indicated that Johnson, Wynne, and Mahalick had willfully failed to properly identify the broker of record on 5 applications and more than 100 orders that were submitted to Meyers in an clandestine manner intended to disguise Johnson’s state registration violations. FINRA alleged that such conduct violated SEC Rules 17a-3(a)(6), 17a-3(a)(17)(i)(A), FINRA Rules 2010 and 4511.
According to the Complaint, Meyers and Wynne had failed in supervising Meyers’ Chicago office by not reviewing electronic correspondence, failed in supervising certain of Johnson’s trades, and failed in supervising the distribution of research and sales literature. FINRA alleged that this conduct was violative of FINRA Rule 2010 and NASD Conduct Rule 3010(a). Finally, Meyers was alleged to have failed in implementing adequate AML policies for purposes of detecting and reporting potentially suspicious activity concerning trading of securities in manipulative fashion. FINRA claimed such conduct violated FINRA Rules 2010 and 3310(a).
Public disclosure records via FINRA’s BrokerCheck reveal that George Johnson has been subject to 9 disclosure incidents. Regarding customer complaints, on June 12, 1997, Johnson had settled a customer dispute for $80,000.00 after a client alleged omissions of fact and a suitability issue. On February 5, 1998, Johnson settled a customer dispute for $100,000.00 after a client alleged account related breach of contract and misrepresentation. On September 10, 1998, Johnson settled a customer dispute for $15,000.00 after a client alleged fraud, negligent representation, and fiduciary duty (breach).
On June 1, 2004, Johnson settled a customer dispute for $15,481.42 after a client alleged unauthorized trades took place in his account. On June 2, 2006, a party was awarded $195,728.11 against Johnson after alleging breach of fiduciary duty, inappropriate activity and excessive trading pertaining to various stocks. Johnson, on May 22, 2007, settled a customer dispute for $2,500.00 after a client alleged unauthorized trading and unsuitable transactions.
Public disclosure records also reveal that Johnson was subject to 2 regulatory events other than the aforementioned Complaint. In August 26, 1994, he was sanctioned by the NASD for $2,500 in connection with an initial public offering mishap. On June 30, 2006, Johnson was fined $1,000 by the Indiana Secretary of State, Securities Division, after alleging certain violations of Indiana Securities Act, Ind. Code 23-3-1.
Public disclosure records via FINRA’s BrokerCheck reveal that Christopher Wynne has one other pending regulatory disclosure, where on March 26, 2010, FINRA alleged that Wynne had failed to properly supervise when at Garden State Securities. Records reveal that Meyers’ has been subject to noineteen regulatory events, and nine arbitrations.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esq., and The Guiliano Law Group, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.