National Group Censures First Jersey, Brennan For ’Serious Misconduct Precede NEWARK, N.J.
WASHINGTON (AP) _ First Jersey Securities, its owner and another official have been suspended from trading and fined on charges of manipulating securities prices, according to the National Association of Securities Dealers.
First Jersey, its high-profile owner Robert Brennan and head trader Anthony Nadino were cited for ″serious misconduct″ by the national trade association.
The action, disclosed Monday, is part of an agreement to settle charges against the New York City-based firm. Brennan, Nadino and First Jersey, who proposed the settlement agreement, neither admitted nor denied the allegations.
″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,″ John E. Pinto Jr., a senior vice president in charge of compliance at NASD, said today.
Brennan and Nardino each agreed to fines of $25,000, censure and a suspension from securities trading from Dec. 1 to Dec. 12. In addition, the company will be fined $300,000, Pinto explained.
The case stems from 1983 sales of over-the-counter stocks in which the firm was charged with inflating prices to customers. The association of securities dealers limits the markup that a brokerage house can charge to 5 percent.
NASD did not cite the specific amount charged, but a separate Securities and Exchange Commission case indicates prices were inflated by as much as 100 percent, according to a report published in The New York Times.
The NASD, the self-regulatory arm of the over-the-counter stock market, said also 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.
Brennan, of Brielle, N.J., resigned as president and chairman of First Jersey earlier this year, saying he wanted to devote more time to his racehorse breeding company. He continues to be the sole owner and a member of the board of directors of the nationwide brokerage firm.
Brennan also faces SEC civil stock fraud charges and a congressional inquiry.
The NASD said in its censure order that the charges, resulting from a complaint filed in February, represent ″serious misconduct.″ 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 settlement does not affect a pending 1979 NASD stock manipulation complaint against Brennan and First Jersey. Brennan and the firm are also 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.