YET ANOTHER FRAUDULENT PROMOTER TIED TO ZIASUN
To: Springald who wrote (25716) 3/31/1999 11:13:00 AM
From: R. L. Chapin Read Replies (1) of 95428
Has anyone taken a look at <ZSUN>? This is a company with several different subsidiaries, including an online San Diego based Brokerage outfit called Amber Securities. The most recent run seems to be tied to their unveiling of a free web mail service. A promoter is in San Diego saying that this stock has upside potential to 50.???
Message 8627972
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Firms Suspended, Individuals Sanctioned
First Geneva Securities, Inc. (CRD #47000, San Diego, California) and Roland Lee Chapin (CRD #2494038, Registered Principal, San Diego, California) submitted a Letter of Acceptance, Waiver, and Consent in which the firm was censured, fined $100,000 jointly and severally with Chapin, and suspended from writing or contributing to the preparation of any research report for six months. Following the suspension, the firm is required to submit any research reports prepared by or for the firm to NASD’s Advertising
Department for approval prior to any report’s distribution to the public for a period of two years. Chapin is suspended from association with any NASD member in any capacity for 60 days, and suspended from writing or contributing to the preparation of any research report for six months.
Without admitting or denying the allegations, the respondents
consented to the described sanctions and to the entry of findings that the firm, acting through Chapin, knew, or should have known, of omitted facts in research reports, and, at a minimum, was reckless in failing to include them in
research reports. The findings also stated that Chapin knew, or should have known, that a disclaimer in a research report failed to mention that the firm held shares for the co-author of the report. NASD also found that the firm, acting through Chapin, failed to establish and maintain a system to supervise
the activities of the firm with respect to research reports. In addition, NASD determined that no one at the firm was given the responsibility to supervise Chapin’s preparation of the reports or to review the reports to ensure that they
complied with NASD rules and federal securities laws. Furthermore the findings stated that no system was in place at the firm with regard to research reports generally, and no one at the firm supervised adequately Chapin’s preparation
of the reports or reviewed Chapin’s work for compliance.
The firm’s suspension from writing or contributing to the preparation of any research report began August 2, 2004, and will conclude at the close of business February 1, 2005. Chapin’s suspension in any capacity began July 19, 2004, and will conclude on September 16, 2004. Chapin’s suspension from
writing research reports began July 19, 2004, and will conclude at the close of business January 18, 2005. (NASD Case #CAF040048) NASD DISCIPLINARY ACTIONS AUGUST 2004 D1 (1 of 21)
nasd.com
First Geneva Securities, Inc. and Roland Lee Chapin
(AWC/CAF040048/August 2004) Acting through Chapin, First Geneva Securities, Inc., knew, or should have known, of omitted facts in research reports, and, at a minimum, was reckless in failing to include them in research reports; and
failed to establish and maintain a system to supervise the activities of the firm with respect to research reports.
Chapin knew, or should have known, that a disclaimer in a research report failed to mention that the firm held shares for the co- author of the report. No one at the firm was given the responsibility to supervise Chapin's preparation of the reports or to review the reports to ensure that they complied with NASD rules and federal securities laws. There was no system in place at the firm with regard to research reports generally, and no one at the firm supervised adequately Chapin's preparation of the reports or reviewed Chapin's work for compliance.
First Geneva Securities, Inc.
Censured; Fined $100,000 jointly and severally with Chapin; Suspended from writing/contributing to the preparation of any research report for 6 months; and following the suspension, the firm is required to submit any research reports prepared by or for the firm to NASD's Advertising Department for approval prior to any report's distribution to the public for a period of two years.
Roland Lee Chapin
Fined $100,000 jointly and severally with First Geneva Securities, Inc.; Suspended 60 days in all capacities; Suspended from writing/contributing to the preparation of any research report for 6 months
Bill Singer's Comment:
An interesting aspect of this case is that the firm apparently held shares for the report's co-author.
I'm assuming that the NASD deemed that some form of undisclosed or hidden compensation. The NASD isn't kidding around with these sanctions. Not only is there a six-figure fine imposed upon the firm and the individual, but both are suspended for 6 months from writing or contributing to the
preparation of any research report. One wonders if such a sanction will ever be imposed on a major firm.
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