The Securities and Exchange Commission charged a New York-based broker and its former anti-money laundering officer for alleged gatekeeper failures, including those related to a scheme orchestrated by two microcap stock financiers.
The agency announced administrative proceedings against Windsor Street Capital LP, formerly known as Meyer Associates, and John Telfer, its former AML officer, for failing to file suspicious activity reports for $24.8 million in suspicious transactions.
That activity included dealings involving Raymond Barton and William Goode, two financiers who were charged separately in a pump-and-dump scheme. The SEC's enforcement division alleged that the financiers deposited large blocks of penny stocks, liquidated them and transferred the proceeds away from the company. The shares deposited by the financiers could not be legally sold, the SEC said in a statement, since a registration statement was not in effect and a registration exemption was not available.
Both Meyers Associates and Telfer should have been aware of the suspicious activities, which led to numerous illegal stock sales, according to the SEC.
Separately, the SEC filed charges in federal court against Barton, Goode and three others — Matthew Briggs, Kenneth Manzo and Justin Sindelman — in a pump-and-dump scheme involving inactive shell companies purportedly in the dietary supplement business. Without admitting or denying the allegations, Barton, Goode and Briggs agreed to settle the charges while paying disgorgement, penalties and interest of more than $8.7 million. Manzo admitted wrongdoing and paid about $95,000 to settle the charges, while the litigation against Sindelman is ongoing.