Court Refuses to Review FINRA Fine Against Penny Stock Broker

Late last week, the Tenth Circuit refused to review a Financial Industry Regulatory Authority (FINRA) fine against a penny-stock brokerage and its chief compliance officer over trading of unregistered securities alleged to be the stock of mostly fictitious high-end car dealerships. The court rejected the Respondents’ argument that there was no “egregious” conduct.  The court was not persuaded.

The appeals court declined to review the fines totaling $100,000 levied against ACAP Financial Inc. — a broker of largely pink-sheet and bulletin-board securities, according to the Securities and Exchange Commission (SEC).  An additional $25,000 fine and six-month suspension was levied against its compliance officer Gary Hume.  FINRA found that ACAP and Hume violated FINRA rules by failing to take adequate steps to prevent the unlawful trading of unregistered shares.

The experienced securities fraud attorneys at Colling Gilbert Wright have investigated and filed numerous actions involving penny stocks and penny stock brokers. If you believe you have been a victim of securities fraud involving penny stocks, please contact our office for a free case evaluation.