Greenwich stockbroker Laurence Allen tries to stop disciplinary hearing

Laurence Allen, a stockbroker who was convicted last year of securities fraud at NYPPEX Inc., a former Rye Brook broker-dealer, says a regulator considering sanctions against him has made a wrongful prosecution.

The Financial Industry Regulatory Authority “went on a crusade against me,” Allen, a resident of Greenwich, said in an affidavit. “In its zeal to exclude me from the industry to which I have devoted decades of my life, FINRA has acted completely against reasonable expectations of good faith and fair dealing.”

But on Feb. 28, the day FINRA had scheduled a disciplinary hearing, Westchester Supreme Court Justice David F. Everett denied Allen’s request to halt proceedings to give him time to investigate. on FINRA.

Allen’s troubles date back to 2019 when New York Attorney General Letitia James accused him of defrauding investors and embezzling more than $13 million.

Last year, Manhattan Supreme Court Justice Barry R. Ostrager found Allen guilty of securities fraud and ordered him and his companies to return $7.9 million in winnings. ill-gotten.

Allen and NYPPEX, which has since moved to Lansing, Michigan, appealed the decision.

Then last July, FINRA accused Allen of repeatedly making false and misleading statements, omitting key facts and failing to disclose risks and rewards in a balanced way to potential investors.

FINRA is a self-regulatory organization authorized by the United States Securities and Exchange Commission to regulate securities dealers and firms. He sought to impose sanctions on Allen, NYPPEX and the company’s chief compliance officer, Michael Schunk, of Bridgeport, Connecticut.

Allen, NYPPEX and Schunk sued FINRA in Westchester Supreme Court on February 23, five days before the disciplinary hearing was to be held, to stop it.

Allen claims that a FINRA attorney questioned one of her attorneys in 2020 about the legal advice she had given him, violating attorney-client privilege.

That attorney and others who represented him refused to testify at the disciplinary hearing, the complaint says, raising concerns that FINRA attorneys “inappropriately obtained privileged attorney-client communications or through their actions… scared them away from participating” in the investigation. hearing.

Allen asked the court for time to investigate his suspicions of prosecutorial misconduct and other unusual actions, “so that I can uncover the hard evidence of wrongdoing at FINRA and build the case for review so that a proper court impartial can have full knowledge of what happened.

To temporarily halt the FINRA hearing, Judge Everett ruled that Allen, NYPPEX, and Schunk must establish undisputed facts, a likelihood of ultimate success on the merits, and irreparable harm if relief is not granted.

They didn’t, he said.

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