Kensington Wells, Inc.
In a separate complaint, NASD Regulation charged 12 former brokers of the now
defunct Long Island brokerage firm Kensington Wells, Inc. with a wide range of
sales practice abuses. The complaint alleges that the 12 brokers, who were based
at Kensington Wells' Mineola, NY headquarters, participated in or facilitated a
boiler room operation through a series of fraudulent sales practices and other
misconduct from April 1994 through October 1996.
Named in the complaint are: Joel Grant, Steven Orandello, James McInerney,
Steven Stecklow, Victor Difrisco, Steven Jaross, Edwin Lawrence, Kevin Loomis,
Edward Stock, Craig Redding, Gary Redding, and Michael Newman.
According to the complaint, the sales practice violations occurred in connection
with Kensington Wells' underwriting of the IPOs of Xechem International, Inc.;
Universal Automotive Inc.; and VideoLan Technologies, Inc. The brokers are
alleged to have engaged in unauthorized trading; baseless or improper price
predictions; making improper comparisons to other stocks; tying the purchase of
IPOs to a commitment to buy stock in the aftermarket; guaranteeing customers
against loss; promising to make up losses with new trades; and refusing to execute
or aggressively discouraging orders to sell stocks, immediately before and after
the IPOs.
At least 60 investors were victimized through fraudulent practices, the complaint
said.
Both complaints demand that the respondents forfeit the profits that were illegally
obtained and make restitution to defrauded investors. The complaint does not
allege any wrongdoing on the part of the issuers.
The issuance of a disciplinary complaint represents the initiation of a formal
proceeding by the NASD in which findings as to the allegations in the complaint
have not been made and does not represent a decision as to any of the allegations
contained in the complaint. Because this complaint is unadjudicated, you may
wish to contact the respondents before drawing any conclusion regarding the
allegations in the complaint.
Under NASD rules, the individuals and the firms named in the complaint can file
a response and request a hearing before an NASD Regulation disciplinary panel.
Possible sanctions include a fine, suspension, bar, or expulsion from the NASD.
© 1998, National Association of Securities Dealers, Inc. (NASD). All rights
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