Firm Suspended, Individual Sanctioned
Patterson, Travis, Inc. (New York, New York) and David T. Travis (Registered
Principal, Englewood, Colorado) submitted an Offer of Settlement pursuant to
which they were censured, and fined $35,000, jointly and severally. Travis was
suspended from association with any NASD member in any principal capacity for
20 business days, and the firm was suspended from participation in any initial
public offering of any security meeting the definition of “penny stock” for one
year. In addition, the firm was required to retain, at or about three months prior to
the conclusion of the suspension from participation in “penny stock”
underwritings, an independent consultant to review the firm's policies, practices,
and procedures with respect to the sale of penny stocks and provide the NASD a
copy of the report, together with documentation of the changes implemented by
the firm as a result of the consultant's review. Without admitting or denying the
allegations, the respondents consented to the described sanctions and to the entry
of findings that the firm, acting through Travis, maintained inventory in amounts
exceeding the maximum inventory value permitted by its restriction agreement
and employed more registered representatives than its restriction agreement
allowed.
The findings also stated that the firm, acting through Travis, offered securities in
an initial public offering that met the definition of a “penny stock,” but did not
comply with Securities and Exchange Commission (SEC) Rules 15g-2, 15g-5,
and 15g-9 in connection with the offer and sale of those securities. Furthermore,
the NASD determined that the firm, acting through Travis, failed to supervise
three individuals and to establish written supervisory procedures reasonably
designed to achieve compliance with rules regarding the conduct of business by
unregistered persons. |
