WASHINGTON--(BUSINESS WIRE)--
The Financial Industry Regulatory Authority (FINRA) announced today that
it has permanently barred Tod Bretton, former Chief Compliance Officer
and Head Trader for Prestige Financial, Inc., of New York, for engaging
in a fraudulent trading scheme that generated approximately $1.3 million
in profits for him and his firm at the expense of customers by
subjecting their orders to improper and undisclosed additional charges.
To conceal the scheme, Bretton falsified order tickets and created
inaccurate trade confirmations. Bretton also failed to cooperate with
FINRA's investigation.
"Investors are entitled to have their stock trades handled properly by
their brokers," said James S. Shorris, FINRA Executive Vice President
and Executive Director of Enforcement. "In this case, Bretton ignored
his obligations, choosing instead to enrich himself at the clients'
expense, and to conceal this with falsified firm records. That he was
both the Head Trader and Chief Compliance Officer for the firm
makes this misconduct especially offensive."
FINRA found that, from at least September 2006 through June 2009,
Bretton, working from the firm's New York office, engaged in a
fraudulent trading scheme in which he took advantage of customers
placing large orders (generally 1,000 shares or more) to buy or sell
stocks. Rather than effecting the trades in the customers' accounts,
FINRA found, Bretton first placed the orders in a firm proprietary
account. He would then increase the price per share for securities
purchased by approximately $.02 to $.05 above the market price before
allocating the shares to the customers' accounts. Similarly, he would
decrease the price per share for securities sold by approximately $.02
to $.05 below the market price before allocating the proceeds to the
customers' accounts. This improper price change was not disclosed to or
authorized by the customers.
Bretton's trading scheme generated approximately $1.3 million in profits
for the proprietary accounts, in which he had a 33 percent interest.
Bretton personally earned approximately $429,000 from this scheme.
FINRA found that to conceal his fraud, Bretton entered false information
on the corresponding order tickets regarding the share price and the
time the customer order ticket was received, entered and executed.
Moreover, the corresponding trade confirmations inaccurately reflected
the price, mark-up and/or commission charged and the order capacity.
Finally, Bretton also failed to cooperate with FINRA's investigation by
failing to comply with his obligation to appear for investigative
testimony.
In settling this matter, Bretton neither admitted nor denied the
charges, but consented to the entry of FINRA's findings.
Investors can obtain more information about, and the disciplinary record
of, any FINRA-registered broker or brokerage firm by using FINRA's
BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2009,
members of the public used this service to conduct 18.5 million reviews
of broker or firm records. Investors can access BrokerCheck at www.finra.org/brokercheckor by calling (800) 289-2999.
FINRA is the largest non-governmental regulator for all securities firms
doing business in the United States. FINRA is dedicated to investor
protection and market integrity through effective and efficient
regulation and complementary compliance and technology-based services.
FINRA touches virtually every aspect of the securities business - from
registering and educating all industry participants to examining
securities firms, writing and enforcing rules and the federal securities
laws, informing and educating the investing public, providing trade
reporting and other industry utilities and administering the largest
dispute resolution forum for investors and registered firms.
For more information, please visit our Web site at www.finra.org.
Financial Industry Regulatory Authority (FINRA) Nancy
Condon, 202-728-8379 Herb Perone, 202-728-8464
Source: Financial Industry Regulatory Authority (FINRA)
<<Business Wire -- 04/30/2010>>
