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Fine, Suspension in Four-Year-Old Trading Case

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RUMSON, N.J. (–The U.S. Securities and Exchange Commission said May 31 that it had settled charges that a New Jersey broker-dealer representative had failed to supervise an employee involved in a penny-stock pump-up scheme in mid-2002.

Without admitting or denying wrongdoing, Robert W. Oakes Jr. of Rumson, N.J. agreed to serve a six-month suspension from acting as a supervisor and pay a $25,000 fine in connection with events that occurred when he was with Phillip Louis Trading Inc.

According to the SEC, Mr. Oakes had working under him a Joseph R. Huard. Among Mr. Huard’s brokerage clients was a group of hedge funds that specialized in penny stock investing. In late 2002, Mr. Huard pleaded guilty to charges of conspiracy to commit wire fraud, mail fraud and securities fraud for making a series of large buys of penny-stock shares at the ends of various months, driving up the prices of the stocks right at the end of the trading day on the last trading days of the months.

SEC officials said Mr. Oakes failed to properly supervise Mr. Huard, and to pick up on signs he was manipulating stock prices, in violation of Phillip Louis policies.

According to the NASD BrokerCheck web site, Mr. Oakes hasn’t worked for Phillip Louis Trading since at least October 2002, when he joined Biltmore International Corp.

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Contact Bob Keane with questions or comments at [email protected].


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