finra

FINRA

For Release:
Contact:
Thursday, June 12, 1997
Nancy A. Condon - (202) 728-8379
Roger B. Sherman - (301) 208-2859

NASD Regulation Suspends, Fines, and Censures 15 Brokers at H.J. Meyers & Co., Inc. for Overcharging Customers

Washington, D.C--NASD Regulation(SM) today announced that it has suspended, fined, and censured 15 current and former managers and registered representatives at H.J. Meyers & Co., Inc. for charging retail customers unfair prices or for failing to prevent this activity.

 

In their settlements with NASD Regulation, the individuals neither admitted nor denied the allegations. NASD Regulation found that the salesmen were responsible for their customers being overcharged. In every case, the salesmen received gross commissions in excess of 10 percent for the sale of the common stock and warrants of Xerographic Laser Images Corp. and Integrated Security Systems, Inc., securities the firm dominated and controlled.

 

Today’s actions arise from NASD Regulation’s investigation into pricing practices at H.J. Meyers. On July 25, 1996, NASD Regulation sanctioned 22 of the firm’s current and former managers and sales representatives, and ordered the firm to pay more than $1 million in restitution and interest to more than 3,000 customers who were charged unfair prices in seven securities H.J. Meyers traded between 1990 and 1993. The firm also paid a fine of $250,000.

 

With this latest action, a total of 37 brokers have been sanctioned, and more than $1.5 million in fines and restitution have been assessed in the H.J. Meyers investigation.

 

"Protecting investors means insuring that they aren’t being overcharged by their brokers," said NASD Regulation Executive Vice President for Enforcement, Barry R. Goldsmith. "As this case demonstrates, a broker can’t reap the rewards of large sales credits or commissions and then claim to have no responsibility for the fairness of the firm’s pricing."

 

Goldsmith continued: "Any time a broker or brokerage firm abuses investors by overcharging them, NASD Regulation will aggressively pursue all of those responsible. Every broker has a responsibility as a salesmen and as a securities professional – and they aren’t

mutually exclusive."

 

The specific sanctions include:

  • David P. Kleber (Miami, FL) – Censured; fined $10,000; suspended for 4 months; barred from acting in any principal or supervisory capacity with right to reapply after one year;
  • Helmut Meister (Sands Point, NY) – Censured; fined $8,000; suspended for 5 business days; and required to re-qualify by examination as a general securities principal within 90 days;
  • John P. McAuliffe (Rochester, NY) – Censured; fined $7,500; and suspended for 5 business days;
  • Dennis J. Keohane (San Francisco, CA) – Censured; fined $7,000; suspended for 3 business days;
  • Innocent K. Okeke (Plano, TX) – Censured; fined $5,000; suspended for 5 business days;
  • Sean P. Nevett (La Jolla, CA) – Censured; fined $4,000; suspended for 4 business days;
  • Lindsey C. Riley (Huntington Beach, CA) – Censured; fined $2,500; suspended for 3 business days;
  • Ignacio R. Failla (Astoria, NY) – Censured; fined $2,500; suspended for 3 business days;
  • Zeeshan Ali (Iselin, NY) – Censured; fined $2,500; suspended for 3 business days;
  • Terry N. Johnson (Forest Hills, NY) – Censured; fined $2,500; suspended for 3 business days;
  • David N. Slavny (Atlanta, GA) – Censured; fined $2,500; suspended for 3 business days;
  • Victor S. Delucie (San Francisco, CA) – Censured; fined $2,500; suspended for 3 business days;
  • Christopher S. Boggs (San Francisco, CA) -- Censured; fined $2,500; suspended for 3 business days;
  • Thomas R. Garcia (Grand Prairie, TX) – Censured; fined $2,500; suspended for 3 business days; and
  • Mark F. Reber (West Chester, PA) – Censured; fined $5,000; suspended for 6 months.

The sanctions against David P. Kleber, the firm’s former compliance officer, relate to his failure to establish, implement, and enforce reasonable supervisory procedures designed to ensure compliance with the rules and policies concerning fair pricing, including commissions and sales credits. Helmut Meister, a branch manager, was cited for both inadequate supervision and charging customers excessive commissions or sales credits. Mark F. Reber was sanctioned for failing to respond to a NASD Regulation request for information.

 

All of these violations occurred while these individuals were employed at Thomas James Associates, Inc., which later acquired H. J. Meyers, and now operates under that name.

 

The significant sanctions imposed in this case are the result of a lengthy investigation conducted jointly by NASD Regulation’s Enforcement Department and the District 8 Office in Cleveland.