By Dan Christensen, browardbulldog.org
A Fort Lauderdale-based securities firm with a checkered past, and its two principal owners, have been hit with $800,000 in fines related to a pump-and-dump penny stock scheme.
Newbridge Securities Corp. was fined $600,000, censured and prohibited from purchasing or making a market in penny stocks for one year by the Financial Industry Regulatory Authority (FINRA).
Newbridge president Guy S. Amico and chief executive Scott Goldstein were fined $100,000 each.
FINRA also suspended Amico and Goldstein from the securities business in any principal capacity – Goldstein for a year; Amico for four months. Amico’s suspension ends Jan. 19, according to reports made public last month.
Nevertheless, Amico remains chairman of the board of Newbridge’s parent, Newbridge Financial Inc. Goldstein is a NFI vice president.
Newbridge operates in South Florida, New York, New Jersey and Illinois.
Regulators, including the U.S. Securities and Exchange Commission, have censured Newbridge at least once every year since 2003 – imposing fines and disgorgement orders on the company that now top $1.2 million.
The alleged violations include overcharging customers, peddling unregistered securities, poor record keeping and failing to properly supervise brokers to prevent high pressure sales tactics and unauthorized trading.
Newbridge is also linked to political controversy involving the campaign of former U.S. Rep. Robert Wexler, D-Boca Raton.
Newbridge boss Guy Amico is the brother of Roy Amico, one of the campaign’s former investment managers and a former representative at Newbridge. Last week, Broward Bulldog reported that in the months before Wexler resigned last year federal agents were asking questions about an unusual $150,000 real estate deal between his campaign and Roy Amico.
For years, the Wexler campaign listed Newbridge as a source of income or loss on its reports the Federal Election Commission. In July 2008, however, the campaign amended 25 disclosure reports dating to 2001 to remove Newbridge’s name and replace it with other firms.
A campaign official said the changes were made to correctly identify firms Roy Amico worked for after he left Newbridge in 2002.
Shortly after the campaign began to change its reports, the SEC accused Newbridge and Guy Amico of failing to reasonably supervise a broker in the office who was manipulating penny stocks. In July 2010, the SEC barred Guy Amico from supervising any broker or dealer for at least two years and ordered him to pay a $79,000 civil penalty.
FINRA disclosed its latest action against Newbridge and Amico in reports made public last month. How many people lost money, and how much was not disclosed, said spokeswoman Nancy Condon.
Amico and Goldstein did not respond to a request for comment.
Newbridge, Amico and Goldstein consented to FINRA’s findings without admitting or denying them. The findings are detailed in signed agreements known as AWCs, or “letters of acceptance, waiver and consent.”
Newbridge’s AWC says that from 2003-2008 the firm committed “numerous violations of FINRA rules and the federal securities laws” regarding “extensive” penny stock trades by its customers.
FINRA said those violations included “market manipulation, improper sales of unregistered securities and the failure to comply with anti-money laundering requirements and failure to supervise” individual brokers. Newbridge also failed to comply with federal disclosure requirements, the agreement says.
The agreement identifies a trio of unregistered Pink-Sheet penny stocks – Hee Corp. (HCCF) OMDA Oil and Gas (OMOG) and Greyfield Capital (GRYF) – that Newbridge allegedly helped peddle to an unwitting public. Each of those stocks is now worthless.
The agreement says Newbridge also helped stock promoters inflate the shares of a fourth penny stock, Global Triad (GTRD), by buying and selling millions of shares. On some days, Newbridge’s trading “consisted of 100 percent of the entire trading volume.” That stock, too, is worthless today.
Amico and Goldstein, who each own 27 percent of Newbridge Securities, were sanctioned for failing to adequately supervise the firm’s two chief compliance officers and anti-money laundering compliance officers from August 2003 to July 2008.
In addition to the fines and suspensions, both men were ordered to complete eight hours of anti-money laundering training.