FINRA barred former LPL Financial broker David Larence Gabai of West Hills, California for employing deceptive, fraudulent and manipulative schemes involving the purchase and sale of a security held in his personal brokerage accounts. These tactics allegedly enabled Gabai to manipulate the price of the security while avoiding margin calls.
According to the findings, Gabai effected a series of wash and pre-arranged trades in NASDAQ's National Technical Systems, Inc. security, in willful violation of the Securities Exchange Act of 1934.
Investigators found that Gabai held significant quantities of these shares in personal brokerage accounts, marking the open and closing prices of the National Technical Systems security along with the wash and pre-arranged trades to create the false or misleading impression of active trading while allowing Gabai to avoid margin calls.
On multiple occasions, Gabai entered a limit order to sell a certain amount of shares that precisely matched a simultaneous limit order to buy the same amount of shares, effectively executing the orders against each other entirely while artificially simulating an active trading environment and raising the closing price of the stock.
If you have invested with David Lawrence Gabai, in National Technical Systems, Inc., or with any broker, financial adviser or firm whose willful violations, fraud, manipulation, or misrepresentations of stock trading activity has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.