FiNRA Bars Chicago-Based Broker For Market Manipulation

The Financial Industry Regulatory Authority has barred broker George Johnson from the industry. The regulator is accusing him of market manipulation involving the artificial inflation of a penny stock’s value. FINRA claims that Newport Coast Securities, which is the last firm where Johnson worked, let its brokers engaging in churning.

According to the self-regulatory organization, over eight days in May 2012, Johnson, while working for Meyers Associates, told customers to buy stocks of iceWEB at prices that were artificially inflated. He also suggested that certain clients sell their shares to match trades between clients.

FINRA said that Johnson manipulated stock to get business from the issuer, which agreed to compensate him for a future private offering. He purportedly worked with a stock promoter to increase iceWEB’s share price to the point that certain warrants could be exercised.

Johnson also has been accused of involvement in a second penny stock fraud and he purportedly has tried to cover up different state securities violations. He has a history of regulatory actions and customer disputes going as far back to 1994. Johnson previously worked for H.J. Meyers & Co. and Jesup & Lamont Securities, two firms that have since been expelled. Meyers Associates also has been linked to a number of regulatory probes.

Chris Wynne, Johnson’s supervisor, has also been sanctioned. He was suspended from the industry by FINRA for two years. He is barred from working as a principal. Wynne must pay a $25,000 fine. Johnson & Wynne previously worked together at American Frontier Financial Corporation, which is no longer FINRA-registered.

Joseph Mahalick, another Meyers Associates broker, is accused of working with Johnson & Wynn to conceal the market rigging scam. He is suspended from the securities industry for six months and must pay a $20,000 fine.

Chris Wynne, Johnson’s supervisor, has also been sanctioned. He was suspended from the industry by FINRA for two years. He is barred from working as a principal. Wynne must pay a $25,000 fine. Johnson & Wynne previously worked together at American Frontier Financial Corporation, which is no longer FINRA-registered.

Joseph Mahalick, another Meyers Associates broker, is accused of working with Johnson & Wynn to conceal the market rigging scam. He is suspended form the securities industry for six months and must pay a $20,000 fine.

Shepherd Smith Edwards and Kantas, LTD LLP is a stockbroker fraud law firm.

Shepherd Smith Edwards and Kantas, LTD LLP is a securities fraud law firm.

FINRA Bars Broker for Market Manipulation, FINRA, February 19, 2016

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