News Release

NASD Charges Kirlin Securities, Two Individuals in Fraudulent Scheme To Avoid Nasdaq Delisting of Parent Company by Manipulating Stock Price

Washington, D.C. — NASD today announced charges against Kirlin Securities of Syosset, NY, (a wholly owned subsidiary of Kirlin Holding Corporation) and two Kirlin officials - Anthony Kirincic, the firms' co-CEO and Kirlin Holding's largest shareholder, and Andrew Israel, Kirlin's head trader - for their roles in a fraudulent scheme to artificially inflate the price of Kirlin Holding stock.

The purpose of the scheme was to increase the stock price to $1.00 a share or higher for 10 consecutive trading days, thereby avoiding a threatened delisting of the stock from the NASDAQ National Market.  NASD also charged that Kirincic forged his parents' signatures on stock certificates and other documents to generate funds to carry out the manipulation scheme. Additionally, NASD charged Kirlin Securities, Israel and David Lindner, then the co-CEO of Kirlin Holding and Kirlin Securities, with failing to obtain best execution on a customer order of Kirlin Holding stock during the same period.

According to NASD's Complaint, the NASDAQ National Market notified Kirlin Holding in February 2002 that the stock price of Kirlin Holding had dipped below $1.00 a share for 30 days and that Kirlin Holding would be delisted unless, within 90 days, its stock price increased to, and remained above, $1.00 per share for 10 consecutive trading days.  Kirincic was the account executive for accounts held by his parents and his sister at Kirlin Securities.  Soon after NASDAQ issued its delisting warning, Kirincic forged his parents' signatures on Kirlin Holding stock certificates and caused Kirlin Holding to repurchase those shares from his parents' account.  He also forged his parents' signatures on letters of authorization to transfer funds generated from these repurchases to his sister's account.

NASD's Complaint charges that beginning on March 18, 2002, Kirincic and Israel began manipulating the stock price of Kirlin Holding by entering large and frequent purchase orders through Kirincic's sister's account at prices in excess of the inside bid.   After placing orders, Kirincic often cancelled those that had been only partially filled and replaced them with other orders at higher prices in an effort to bid up the price of the security. The size of these transactions often dwarfed the historic average daily volume for Kirlin Holding. In addition, Kirincic's trading through his sister's account constituted a significant majority of the trading volume and number of transactions in the stock, thereby dominating the market for Kirlin Holding stock throughout the manipulation.

Kirlin, Kirincic, and Israel successfully created an illusion that the demand for Kirlin Holding's common stock was increasing based on genuine customer demand.  Their scheme succeeded in raising the price of Kirlin Holding's common stock from $.64 per share on March 18, 2002, to more than $1.00 per share on April 2, 2002, despite an absence of any news or other apparent reason for the company's stock price to increase.

After April 2, 2002, Kirlin, Kirincic and Israel successfully maintained Kirlin Holding's stock price at or over $1.00 per share for at least 10 trading days, using the same manipulative methods. On April 18, 2002 NASDAQ informed Kirlin Holding that it had satisfied the market's listing requirements by having its stock price exceed $1.00 for 10 consecutive trading days and therefore the stock would not be delisted. 

NASD's Complaint charges Kirlin Securities, Kirincic, and Israel with fraud under the federal securities laws and NASD rules.

NASD's Complaint also charges that on April 22, 2002, while Kirlin Holding's stock was still trading at more than $1.00 per share, Kirlin Securities, through Lindner and Israel, executed a sale of a customer's shares in Kirlin Holding at $.80 per share in a transaction with Kirlin Holding.  At the time of this trade, the inside bid for the stock was $1.04 per share, and two of Kirincic's own relatives had sold their Kirlin Holding's stock for $1.05 per share. This violates the obligation under NASD rules for the firm, Lindner, and Israel to achieve best execution for their customer's order.

In January of this year, Kirlin Holding voluntarily ceased having its stock listed on NASDAQ Stock Market and ceased filing periodic reports under the federal securities laws. Its stock is currently quoted in the Pink Sheets (Other OTC:KILN.PK).

Under NASD rules, a firm or individual named in a complaint can file a response and request a hearing before an NASD disciplinary panel.  Possible remedies include a fine, censure, suspension or bar from the securities industry, disgorgement of gains associated with the violations, and payment of restitution.

Investors can obtain more information about, and the disciplinary record of, any NASD-registered broker or brokerage firm by using NASD's BrokerCheck. NASD makes BrokerCheck available at no charge to the public. In 2004, members of the public used this service to conduct more than 3.8 million searches for existing brokers or firms and requested more than 190,000 reports in cases where disclosable information existed on a broker or firm. Investors can link directly to BrokerCheck at  Investors can also access this service by calling (800) 289-9999.

NASD is the leading private-sector provider of financial regulatory services, dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services.  NASD touches virtually every aspect of the securities business - from registering and educating all industry participants, to examining securities firms, enforcing both NASD rules and the federal securities laws, and administering the largest dispute resolution forum for investors and registered firms.  For more information, please visit our Web site at