First Jersey Chief Says Firms Hopes To Put Behind Misconduct Charges
NEWARK, N.J. (AP) _ The chairman of First Jersey Securities, which was fined on charges of manipulating securities prices, said Tuesday that the company agreed to the penalties so it could put its problems behind.
″We expect to do business as a respected member of the business community,″ said Fredric W. Rittereiser, who heads the beleagured securities dealer.
First Jersey, its high-profile owner Robert Brennan and head trader Anthony Nadino were cited Monday for ″serious misconduct″ by the National Association of Securities Dealers, the regulatory arm of the over-the-counter market.
Brennan and Nadino each agreed to fines of $25,000, censuring and suspension from securities trading from Dec. 1 to Dec. 12. In addition, the company was fined $300,000, according to John E. Pinto Jr., a senior vice president in charge of compliance at NASD.
″It’s not just a little slap on the wrist. Censure is meaningful and we view the whole package as containing substantial penalties for the infractions,″ Pinto said.
Brennan, Nadino and First Jersey, who proposed the settlement agreement last week, neither admitted nor denied the allegations against themselves and the New York-based firm.
Rittereiser, who replaced Brennan as chairman on Sept. 1, said, ″The important part of this action is we accepted this outcome. We really sincerely feel that this is a meaningful step in the resolution of all our outstanding regulatory problems.″
Rittereiser said the settlement was proposed ″basically because it’s a 3 1/2 -year-old problem that could have gone on for another seven years.″
″Basically, the company doesn’t admit or deny anything,″ he added. ″We did this so we can get it behind us.″
Rittereiser said he knew outstanding Securities and Exchange Commission civil stock fraud charges against the company would not be dropped, ″but it shows First Jersey is willing to fulfill its side of the bargain.″
In addition to the SEC civil charges, Brennan and First Jersey face a congressional inquiry.
Almost since its 1974 inception, First Jersey has been nagged by investigations and allegations of excessive mark-ups.
The case involving NASD stems from 1983 sales of over-the-counter stocks in which the firm was charged with inflating prices to customers. The NASD limits the markup that a brokerage house can charge to 5 percent.
The NASD also alleged that during one week in December 1983, First Jersey violated industry rules by failing to report the trading of 701,800 shares of TransNet common stock to the NASDAQ System.
The association said First Jersey’s pricing policies violated an industry rule barring the sales of securities ″by means of any manipulative, deceptive or fraudulent″ practice.
The NASD said in its censure order that the charges resulted from a complaint filed in February.
The settlement, however, does not affect a pending 1979 NASD stock manipulation complaint against Brennan and First Jersey. Brennan and the firm also are facing a year-old lawsuit in which the SEC accused them of fraud and deceit in the sale of three low-priced over-the-counter stocks.
Rittereiser said Brennan has been involved in ″negotiations and discussions on a change of ownership, which would pass to a group under a new management team″ headed by the new chairman and other top executives.
Rittereiser said a name change might then be considered.
He said questions raised by ongoing investigations have made business difficult at times.
″The controversy surrounding Mr. Brennan and regulatory agencies, mainly the SEC, has taken on a life of its own, so to speak,″ he said.
Brennan, of Brielle, N.J., said when he resigned as president and chairman of First Jersey that he wanted to devote more time to his racehorse breeding company.
He continues to be the sole owner of the nationwide brockerage firm he founded and a member of its board of directors.
Calls to Brennan’s home and office were not returned Tuesday.