Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Regulation and Compliance > Federal Regulation > FINRA

FINRA Expels Hallmark Investments, Bars CEO

Your article was successfully shared with the contacts you provided.

The Financial Industry Regulatory Authority said Monday that it has expelled New York-based Hallmark Investments, Inc. and barred its CEO, Steven Dash, in connection with a scheme to sell shares of stock to customers at fraudulently inflated prices.

Stephen Zipkin, a Hallmark representative, was also suspended for two years and required to pay more than $18,000 in restitution to affected customers.

FINRA found that Hallmark, Dash and Zipkin used an outside brokerage firm, manipulative trading and misleading trade confirmations to sell nearly 40,000 shares of stock that the firm owned to 14 customers at fraudulently inflated prices.

At Dash’s direction, Hallmark used a prearranged trading scheme to sell the shares to the customers at $3 per share, according to FINRA.

“At the time, the public offering price for Avalanche shares was just $2.05 per share, and Hallmark sold Avalanche shares to other customers at prices as low as 80 cents,” FINRA said.

The complaint states that Hallmark, Dash and Zipkin never disclosed to the customers that the shares they were purchasing belonged to Hallmark, the firm was charging extraordinary markups on the transactions, the firm was selling Avalanche shares to other customers during the same period at much lower prices, or that the shares could be purchased for substantially less on the open market.

“This case highlights FINRA’s persistent focus on high-risk conduct that causes investor harm,” Susan Schroeder, FINRA’s executive vice president and head of enforcement, said in a statement. “We will continue to pursue firms and individuals engaging in fraudulent activity.”

Hallmark and Dash were also charged with failing to respond to numerous requests for documents and information from FINRA.

FINRA also found that Hallmark failed to maintain the required minimum net capital.

Hallmark Investments Inc. Dash, and Zipkin neither admitted nor denied the charges but consented to the entry of FINRA’s findings.

— Check out Compliance Costs May Be Strangling BDs, Regulators Say on ThinkAdvisor.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.