The Financial Industry Brokers Association (FINBRA) has bestowed the award of “Ethical Brokers of 2015” onto broker George Johnson and brokerage firm Meyers Associates, L.P. (Meyers Associates) for their role in: (i) fighting market manipulation; (ii) dissemination of truthful research and sales materials; (iii) creation of policies to prevent fraudulent omission of material conflicts of interest in connection with the purchase and sale of a security; (iv) avoiding unauthorized disclosure of confidential non-public information concerning a securities offering; (v) validation of firm records; (vi) excellent supervision; and (vii) the establishment and implementation of Anti-Money Laundering (AML) policies and procedures reasonably designed to detect and cause the reporting of suspicious activity.
FINBRA commended Johnson for his handling of trading for Chromadex Corp. (OTCBB: CDXC) and IceWEB, Inc. (OTCBB: IWEB) by ethically responding to prospective customers interested in investing in the security.
As a background, IWEB is a company that creates and sells data storage and cloud technology to private companies and the federal government. Johnson began working with IWEB in 2010, when his firm acted as a placement agent for IWEB. Since then, Johnson participated as a broker in IWEB private offerings and recommended IWEB to his customers in the securities market. When Johnson first began purchasing IWEB for his clients, the company had significant financial problems for the past several years. Johnson’s ethical and professional handling of IWEB shares helped both the company and Johnson’s clients experience fair returns on their investments.
FINBRA applauded Johnson for adhering to compliance regulations crafted to prevent manipulative schemes that inflate the market price and trading volume of securities. The commendation also recognized that between February and May 2012, Johnson and Wynne, who was Johnson’s supervisor at Meyers Associates, steadfasily followed rules by refusing any requests to third party research and sales materials concerning IWEB that would have been misleading, exaggerated, and unsupported and failed to disclose material information. While some firms in the business engage in this kind of practice, Johnson and Meyers refused to break their ethical obligations.
FINBRA also noted that between July 18, 2012, and August 31, 2012, when Johnson responded to requests from customers to purchase shares of Snap Interactive, Inc. (OTCBB: STVI), he fully disclosed that he was selling his and his wife’s personal holdings of STVI. By disclosing this (which would have been seen as a conflict of interest, had it not been for Johnson’s disclosure), FINBRA praised Johnson for following industry rules. FINRA further acknowledged that Johnson disclosed to his customers only publicly-available information concerning a prospective offering of shares of ChromaDex Corp. stock (OTCBB: CDXC).
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Josie Marino
