FINRA barred former Meyers Associates LP broker George Johnson and suspended his supervisor, Christopher Wynne, for allegedly scheming to artificially inflate the market price of over-the-counter penny stock IceWEB, Inc. (OTCBB: IWEB). FINRA noted that Johnson engaged in additional fraud relative to another penny stock, Snap Interactive, Inc. (OTCBB: STVI).
FINRA also barred Wynne from serving as a principal and fined him $25,000 while suspending and fining broker Joseph Mahalick for falsifying firm records (Mahalick refused to cooperate with the investigation, resulting in a separate ban from the securities industry).
FINRA OHO Disciplinary Proceeding #2013035533701 (Johnson)
FINRA OHO Disciplinary Proceeding #2013035533701 (Wynne)
FINRA OHO Disciplinary Proceeding #2013035533701 (Mahalick)
According to the findings, Johnson manipulated the market for IWEB by excessively recommending his customers buy IWEB at higher and artificially inflated prices while recommending that other customers sell their shares, thus manipulating the OTC stock's trading volume.
FINRA described Johnson and Wynne's conduct in sending sales materials that omitted certain material facts about IWEB as "misleading, exaggerated and unwarranted" while noting that Johnson disclosed confidential information to certain potential purchasers. Investigators stated that Johnson disclosed confidential material nonpublic information concerning ChromaDex Corp. stock (OTCBB: CDXC) to customers without firm permission.
In regards to the additional count of fraud, Johnson purportedly recommended that certain customers purchase shares of STVI while failing to disclose that he personally was liquidating his own positions in the stock from his personal accounts. For this, FINRA charged Johnson with fraudulent omission of material conflicts of interest in connection with the purchase and sale of a security.
On at least one occasion, Johnson used one customer's sales to fill buy orders for another customer, accounting for nearly 1 million shares purchased by customers on one specific day of trading.
FINRA cemented its charges of dissemination of spurious "research" and sales materials in referring to a series of e-mails and a post/tweet on Twitter regarding the apparently bogus ad campaign entitled, "By Dumb LUCK I Just Discovered the PERFECT Tech Stock...In My Backyard!"
Finally, the trio allegedly made a habit of entering false information to cover Johnson's violations. This falsification occurred at least 100 times and in many cases indicated that Wynne or Mahalick were responsible for accounts or transactions effected by Johnson.
If you have invested with George Johnson, Christopher Wynne, Joseph Mahalick, Meyers Associates or with any broker, financial adviser or firm whose fraudulent activity, misleading, exaggerated or unwarranted representations, omissions of fact, market manipulation, or other illicit or illegal conduct has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.