The Financial Industry Regulatory Authority (FINRA) recently announced that it has barred broker George Johnson (CRD # 2245802) from the securities industry for engaging in a manipulative trading scheme to artificially inflate the market price and trading volume for the common stock of IceWEB, Inc. (OTCBB: IWEB). FINRA also sanctioned Christopher Wynne (CRD # 7654), Johnson’s supervisor, suspending him for two years in all capacities, barring him in a principal capacity, and fining him $25,000. Joseph Mahalick (CRD # 5563167), another broker who worked with Johnson and Wynne, was suspended for six months and fined $20,000 for falsifying firm records and has been barred from the securities industry in a separate action. Johnson, Wynne and Mahalick all worked for Meyers Associates L.P. in that firm’s Chicago branch office during the time period of the misconduct.
FINRA found that Johnson manipulated the market for IWEB by recommending that certain of his customers buy at increasingly higher and artificially inflated prices while also recommending his other customers sell their shares, frequently matching trades between the customers. FINRA found that among Johnson’s motives for manipulating the stock was the fact that he wanted to obtain business from the issuer for which he would anticipate receiving compensation in connection with a future private offering. Johnson coordinated a campaign with a stock promoter to attempt to increase the stock’s share price to a level that would allow for the exercise of certain warrants.
Brad Bennett, FINRA’s Executive Vice President and Chief of Enforcement, said, “Any broker engaging in manipulative activity poses a threat to market integrity and has no place in the securities industry. The branch office manager, who was the first line of defense in supervising George Johnson’s activities, completely failed to supervise his transactions to ensure compliance with securities laws and FINRA rules.” FINRA also found that Johnson and Wynne sent customers sales materials that omitted information concerning material conflicts of interest and material risks concerning IWEB’s business, and contained misleading, exaggerated and unwarranted information. Moreover, Johnson disclosed confidential information to potential purchasers concerning another offering.
In addition to the IWEB scheme, FINRA found that Johnson committed fraud by recommending that certain of his customers purchase shares of another penny stock without disclosing to them that he was liquidating his own personal positions of the security from his own brokerage accounts. Furthermore, FINRA’s investigation found that to cover up Johnson’s violations of state securities registration requirements, Johnson, Mahalick and Wynne agreed to the practice of entering false information on more than 100 order memoranda, indicating that Wynne or Mahalick was responsible for the account or transactions, instead of Johnson.
George Johnson was registered with the securities industry for twenty three (23) years, and was registered with the following firm(s):
Newport Coast Securities, Inc.
CRD # 16944
Chicago, IL
4/2013 – 2/2016
Meyers Associates L.P.
CRD # 34171
Chicago, IL
11/2011 – 5/2013
Anderson & Strudwick, Inc.
CRD # 48
Chicago, IL
7/2010-12/2011
Jesup & LaMont Securities Corp.
CRD # 39056
Chicago, IL
11/2009-7/2010
Garden State Securities, Inc.
CRD #10083
Chicago, IL
5/2005 – 11/2009
Stifel, Nicolaus & Co.
CRD #793
St. Louis, MO
3/2001-5/2005
Auerbach, Pollak & Richardson, Inc.
CRD # 29824
Stamford, CT
12/2000-3/2001
American Fronteer Financial Corp.
CRD # 1398
Denver, CO
10/1998 – 12/2000
H.J. Meyers & Co., Inc.
CRD# 15609
Rochester, NY
7/1992-10/1998
Christopher Wynne was registered with the securities industry for sixteen (16) years, and was registered with the following firm(s):
Newport Coast Securities, Inc.
CRD # 16944
Chicago, IL
4/2013-2/2016
Meyers Associates, L.P.
CRD # 34171
Chicago, IL
11/2011-5/2013
Anderson & Strudwick, Inc.
CRD 48
Chicago, IL
7/2010-12/2011
Jesup & LaMont Securities Corp.
CRD 39056
Chicago, IL
11/2009-7/2010
Garden State Securities, Inc.
CRD 10083
Chicago, IL
5/2005–11/2009
Stifel, Nicolaus & Co.
CRD 793
St. Louis, MO
3/2001-5/2005
Auerbach, Pollak & Richardson, Inc.
CRD 29824
Stamford, CT
12/2000-3/2001
American Fronteer Financial Corp.
CRD 1398
Denver, CO
11/1999-12/2000
Joseph Mahalick was registered with the securities industry for seven (7) years, and was registered with the following firm(s):
Newport Coast Securities, Inc.
CRD 16944
Chicago, IL
4/2013-10/2015
Meyers Associates, L.P.
CRD 34171
Chicago, IL
11/2011 – 5/2013
Anderson & Strudwick, Inc.
CRD 48
Chicago, IL
7/2010-12/2011
Jesup & LaMont Securities Corp.
CRD 39056
Chicago, IL
11/2009-7/2010
Garden State Securities, Inc.
CRD 10083
Chicago, IL
9/2008-11/2009
If you have suffered investment losses as a result of your broker’s or brokerage firm’s misconduct, contact the Hanley Law to discuss your legal options. The Hanley Law is dedicated to helping investors nationwide. If you have lost money as a result of your broker’s recommendations, you may be entitled to recover your investment losses. Contact our office toll free at (239) 649-0050 for a complimentary initial consultation.