IAR IS THE FIRM THAT TOOK CON-O-LOG PUBLIC. VTR IS THE FIRM THAT CON-O-LOG'S MAIN FRAUDSTER WAS ALLEDGED TO BE RUNNING.
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Brokers Fined $25,000 Each by NASD Appeals Panel in VTR Case
8/17/0 16:3 (New York)
Brokers Fined $25,000 Each by NASD Appeals Panel in VTR Case
Washington, Aug. 17 (Bloomberg) -- Two brokers charged in
1998 for their roles in a $400,000 stock manipulation involving a
New York brokerage were each fined $25,000, the National
Association of Securities Dealers said Thursday.
An NASD appeals panel ruled that Howard R. Perles, a trader
at IAR Securities Corp., and Laurence M. Geller, a trader at Wien
Securities, aided and abetted VTR Capital Inc. in fraudulently
manipulating the stock of Interiors Inc., a Mount Vernon, New York
home furnishings company whose common stock is listed on Nasdaq.
In so doing, NASD's National Adjudicatory Council (NAC)
reversed a prior hearing panel's decision to dismiss the charges
against Perles and Geller. NAC concluded that the two engaged in
``prearranged, matched trading'' with VTR Capital, now called
Fairchild Financial Group Inc., in separate instances, over the
course of three days.
Lawyers for the two men said they plan to appeal the panel
ruling to the Securities and Exchange Commission.
Specifically, NAC said the two traded Interiors stock in
large volume back and forth with VTR Capital, when Interiors stock
was trading thinly, NAC said. Then, they accumulated large short
positions that were ``economically irrational'' given the large
risk and razor-thin profits that they were making, NAC said.
Also, the two traded Interiors stock with VTR Capital in a
``symmetrical'' pattern, NAC said. Interiors, whose common stock
is listed on Nasdaq, is a Mount Vernon, New York, home furnishings
company.
Appeal Planned
``The NASD's decision to impose sanctions against Mr. Perles
is directly contrary to clear legal precedent,'' said Perles'
lawyer, Marc Dorfman, a partner with Freedman, Levy, Kroll &
Simonds in Washington. ``Additionally, the decision is unsupported
by the evidence. Accordingly, Mr. Perles expects to prevail on
appeal.''
Jeffrey Rosen, an attorney for Geller DeMartino Finkelstein
Rosen & Virga in Washington, said, ``We respectfully disagree with
the decision. We believe that the the decision of the first
hearing panel that Mr. Geller did not aid and abet fraudulent
conduct was correct. Accordingly, Mr. Geller to prevail in the
forthcoming appeal before the SEC.''
VTR Capital and its president Edward McCune agreed in
December 1998 to pay $400,000 to settle NASD charges in the
matter.
NAC warned that aiding and abetting a manipulation violates
NASD rules requiring market participants to adhere to ``high
standards of commercial honor and just and equitable principles of
trade.''
``Perles and Geller rejected commercial honor and engaged in
an unjust and inequitable scheme,'' the council said.
NAC, however, did uphold the earlier hearing panel's
dismissal of charges that Perles and Geller aided and abetted VTR
in an unregistered distribution of Interiors stock. NASD
enforcement officials had not proved that the two men were aware
that VTR was engaged in an unregistered distribution, the council
said.
In addition the fines, Perles and Geller each were required
to requalify as general securities representatives. Perles was
suspended for one year and Geller for 30 business days.
NAC is a 14-person committee made up of seven industry and
seven non-industry representatives that meets bi-monthly to hear
appeals of hearing panel decisions and address policy matters.
--Vicky Stamas in Washington at (202) 624 1958 or
vstamas@bloomberg.net /ge |
