Guilty pleas, indictments in New York stock case
By Jeanne King
NEW YORK, April 25 (Reuters) - Twenty-two people pleaded guilty Tuesday and 20 others were indicted in connection with their roles at a defunct securities firm that cost 16,000 investors over $176 million, officials said.
The firm, Meyers Pollock Robbins Inc., and its brokers faced a host of charges, including enterprise corruption, fraud, grand larceny, bribery and falsification of business records.
More than 16,000 of the firm's investors, many of them elderly, lost more than $176 million on two dozen worthless stocks sold to them from 1992 to 1997, including a three-man pizza parlor in Poland called QPQ Corp., prosecutors said.
"You've got to make Wall Street safe for Main Street investors," said Joseph Borg of the Alabama Securities Commission, which helped in the investigation.
Manhattan District Attorney Robert Morgenthau said none of the worthless companies had any assets and "millions of dollars" was laundered for the purpose of raising cash.
In December 1997, state regulatory agencies closed Meyers Pollock. Headquartered in Manhattan, the brokerage had branches on Long Island and in Las Vegas and Fort Lauderdale and Boca Raton, Florida.
President Michael Ploshnick, 55, of Boca Raton was indicted. Morgenthau said Ploshnick, who gained control of the firm in 1992, ran it "as a haven from regulation, supervision and compliance in the securities industry."
"It was a classic pump-and-dump operation. They would run up the stock and then sell out their own nominee accounts," he said.
According to the 140-page indictment, the defendants promoted stock that no one would sell on its own merits.
The indictment alleged that the defendants lied to investors about the value of the securities sold, their market price and the brokers' own economic interest in sales.
Morgenthau said that once the brokers got investors to open accounts and send money, they would switch customers to highly speculative stocks that would otherwise be hard to sell. They would assure customers that the price of these stocks would rise quickly, claiming inside information, he said.
An elderly New Jersey woman living in a nursing home lost more than $100,000, or 95 percent of her assets, when brokers made unauthorized trades, prosecutors said.
21:25 04-25-00 |
