Midas Securities & Registered Principal Jay S. Lee Disciplined for Unlawful, Irresponsible Conduct
The Financial Industry Regulatory Authority (FINRA) fined the firm Midas Securities, LLC $80,000 and fined broker-dealer Jay S. Lee $50,000 for unregistered sales of securities, conduct inconsistent with just and equitable principles of trade, failure to establish written supervisory procedures and failure to supervise. Lee was also suspended for two years, effective April 16, 2012 through April 15, 2014.
FINRA found that Lee, who served as Midas's president and chief executive officer from 2002 through 2010, oversaw the unlawful sale of securities without the required registration statements or exemptions in effect. Because these unlawful sales occurred on Lee's watch, Lee was additionally fined for failure to maintain and execute written supervisory procedures.
From December 2004 through February 2005, Midas sold 760,000 shares of penny stock iStorange, Inc., failing to register transactions related to these sales. Additionally, Midas was found to have misrepresented restricted securities in sales to the public as reissued stock. These securities were sold in consultation with iStorage's transfer agent under a different "street name," which would make it more appealing to third parties and more difficult for overseeing agencies to detect.
Midas and Lee have been disciplined before: In 2004, the firm settled a FINRA disciplinary action involving the sale of registered securities, accepting a censure and $10,000 fine. During the present investigation, Midas voluntarily withdrew its FINRA membership.
If you believe you have been the victim of a fraudulent securities scheme or have been coerced into a purchase or sale of securities based on misleading or false information please call The Law Offices of Jonathan W. Evans & Associates at 818-760-9880 for an investigation and consultation.