Securities Industry Commentator by Bill Singer Esq

Medical company threatens to sue volunteers that 3D-printed valves for life-saving coronavirus treatments / The valve typically costs about $11,000 - the volunteers made them for about $1 (The Verge.com by Jay Peters)

[In]Securities Guest Blog: Who's Zoomin' Who by Aegis Frumento Esq (BrokeAndBroker.com Blog)

Ex-Stockbrokers Convicted of Conspiring with Long Island Boiler Rooms to Dump Stock on Unsuspecting Investors / Defendants Orchestrated Stock Manipulation Scheme That Cost Elderly Victims Millions (DOJ Release)

In the Matter of Mark Feathers (SEC ALJ Order)

Sutter CEO and Founder, Bob Muh to Retire Following Impressive 40 Year Career (Press Release from Boustead & Company)

From 2013 to 2017, Chartier, Isen and two boiler rooms located in Plainview and Melville, New York - known as, among other names, Elite Stock Research and Power Traders Press - artificially inflated the price and trading volume of the four stocks.  They did so through a cold-calling campaign that used lies and high-pressure sales tactics to lure victims, many of whom were elderly, into purchasing stock.  The conspiracy's market manipulation fraudulently inflated the stock price of the four stocks by more than $147 million.   

Chartier, who became a major shareholder in CESX and NWMH after persuading those companies to retain him to help take them public, used the boiler rooms to dump nearly $2 million worth of those companies' shares on unsuspecting victims.  He also sold stock to individuals in private transactions without telling them that the stock had been manipulated to trade at an artificially high price and volume.  Using some of the proceeds from his fraudulent scheme, he purchased a $350,000 luxury RV equipped with a flat screen television and a fireplace, which he used as a traveling office.

After Chartier was arrested in July 2017, and after waiving his Miranda rights, he lied to FBI Special Agents about his and others' involvement in the scheme, including that he sold NWMH shares only via purchase agreements.

Isen, who was barred from acting as a broker by FINRA in 1996 and convicted of wire fraud conspiracy in the Southern District of New York in 2000, orchestrated the manipulation of stock belonging to, among others, major HECC shareholder Michael Watts and major ICEIF shareholders located in India.  Watts was previously convicted in October 2019 for his role in the stock manipulation scheme following a month-long jury trial and is awaiting sentencing.

Chartier and Isen are the 15th and 16th defendants convicted in this case.  Four defendants have been sentenced for their roles in the scheme:  Ronald Hardy was sentenced to 10 years' imprisonment; Dennis Verderosa was sentenced to six years' imprisonment; McArthur Jean was sentenced to four years' imprisonment; and Emin Cohen was sentenced to two years' imprisonment.

The government's case is being handled by the Office's Business and Securities Fraud Section.  Assistant United States Attorneys Whitman G.S. Knapp and Kaitlin T. Farrell are in charge of the prosecution.  Assistant United States Attorney Tanisha R. Payne of the Office's Asset Forfeiture Section is handling the forfeiture matters.

[T]his response falls short of what was required. No production has been ordered yet. I have twice asked the Division to submit a proposal for reviewing responsive documents, and both times the Division has said it is unable to take even that preliminary step. Although the Division is now prepared to "undertake a box-level review" of the paper files it previously identified, it states that a review of the emails and electronic documents would be impossible without individually examining each of the 20,000 emails. 

The Division's position is that the documents sought are irrelevant and privileged. Although the Division may set forth reasons and examples to establish its position, it is not the role of Division counsel to decide what is relevant and privileged at the outset and then decline to comply with my orders. Moreover, the Division cannot reasonably reach the conclusion that no documents are relevant when it has not yet undertaken any review of them and counsel is admittedly unfamiliar with their content. And no showing has been made to establish that the estimated 18 boxes of paper files it has not previously produced are all privileged. Also, there is surely some ability to conduct a computer-aided search of the emails and electronic files, rather than counsel having to examine each one individually. 

My March 11, 2020, order was an attempt at finding a balance between an intensive document-by-document review and conducting no review at all. I 2 still believe such a balance can be achieved, for both the paper files and electronic documents, including emails. I will give the Division a third chance to propose a method for reviewing the documents. If the Division is unwilling or unable to do so, I will order search criteria and in camera review of the entire corpus, if necessary. The Division's proposal for both paper and electronic review is due April 1, 2020. The Division's estimate of time must be supported by a declaration and include reasoned methodology. Its full privilege log would be due later after it has completed review of the documents or in connection with in camera review, if one of those steps is ordered. 

Bob Muh, President and Co-Founder of Sutter Securities, Inc. "("Sutter") has announced his retirement from serving as President of Sutter. Bob will remain on Sutter's Board of Directors. 

Boustead & Company Limited and Sutter congratulate Bob on his retirement and we celebrate his more than four decades of experience in the financial services industry.

Bob co-founded Sutter, based in San Francisco in 1992. After serving as an officer in the U.S. Army, Bob began his business career at the consulting firm of McKinsey & Company. He left McKinsey to become a major owner and President of Newburger, Loeb & Co., a NYSE member firm. Prior to founding Sutter, he was a partner at Bear Stearns in both Los Angeles and San Francisco.

Bob has also been actively involved in industry affairs throughout his career. He has served as Chair of FINRA's Small Firm Advisory Committee and Chair of the District 1 Committee. He was a member of the National Arbitration and Mediation Committee. In 2016, he was elected to a three-year term on the FINRA Board of Governors. Mr. Muh has been a frequent speaker at FINRA's Conferences.

In addition, he has served on more than 20 corporate and non-profit boards. He was a Trustee of the Massachusetts Institute of Technology for more than 20 years and he is currently a Life Trustee Emeritus. In 2019, Bob was elected Chairman of the Board of the Culinary Institute of America. Bob is a graduate of MIT and he holds both an MBA and a M. Phil. from Columbia University where he was an Adjunct Assistant Professor at the Business School. Bob was also an Adjunct Professor at the University of San Francisco Law School and an advisor to the Law School's Investor Justice Project.

• Securities Industry Commentator
• Bill Singer