South Florida Arbitration & Litigation Lawyer Blog
Boca Raton, Florida Securities Fraud and Mismanagement Attorney, Russell L. Forkey, Esq.
June, 2011:
Please keep in mind that the complaints issued by FINRA represents FINRA’s initiation of a formal proceeding in which findings as to the allegations in the complaint have not been made, and does not represent a decision as to any of the allegations contained in the complaint. Because these complaints have not yet been adjudicated, you may wish to contact the respondents before drawing any conclusions regarding the allegations in the complaint.
Robert Marcus Lane Jr. (CRD #1411773, Registered Principal, North Palm Beach, Florida, formerly licensed with Greenwich High Yield LLC.) was named as a respondent in a FINRA complaint alleging that he engaged in fraudulent interpositioning by causing his member firm to purchase distressed bonds from a broker-dealer and immediately caused the firm to sell the bonds at a markup to an entity he owned and controlled. The complaint alleges that Lane then caused his firm to repurchase the same bonds from the entity, typically at a second markup, and immediately caused his firm to sell the bonds to a firm customer at a third undisclosed markup. The complaint also alleges that Lane did not disclose to the customers that his firm had repurchased the bonds from one of the entities; the customers paid undisclosed markups ranging from 6.45 percent to 40.93 percent. The complaint further alleges that the interpositioning resulted in a profit totaling more than $322,000 for his firm and the entities he owned and controlled; since he was the majority owner of the firm and the sole owner of the entities, he personally benefited from the excessive profits the undisclosed markups earned. In addition, the complaint alleges that Lane knew, or was reckless in not knowing, that his interpositioning scheme would result in increased costs and excessive and fraudulent prices being charged to the customers, and were material facts he should have disclosed to the customers. Moreover, the complaint alleges that Lane charged unfair and unreasonable prices and excessive markups, and sold the bonds at prices that were not fair, taking into consideration all relevant circumstances, including market conditions with respect to such security at the time of the transaction, the expense involved, the fact that the firm is entitled to a profit and the factors set forth in NASD Interpretative Material-2440. Furthermore, the complaint alleges that Lane failed to provide complete and timely responses to FINRA’s request for information and documents. (FINRA Case #2007008204901).