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Question and Answer(s)
Brokers
Category: Business Law   State(s), Country: MD (MD), US   Posted: 11/26/2006

Three securities brokers agree in a conversation to aggressively sell a certain stock and then sell their own shares at a profit after the share price increases to a certain dollar value. However, one of the brokers later decides not to go along with the plan. Is this broker guilty of a crime?
Replies: 2
Steven Rinaldi

I suggest you contact both the United States Securities and Exchange Commission, Division of Enforcement, and the Maryland Attorney General's Office, Securities Division. Dale Cantone is the person that you want to contact in the Maryland Attorney General's Office, Division of Securities. Using artifical devicies to manipulate the price of a security probably violates both federal and Maryland laws and regulations.

Sincerely,

Steve Rinaldi
Daniel Press

The broker who backs out of the "pump and dump" conspiracy has still violated the law by agreeing (conspiring) in the first place. However, he can probably mitigate his liability and possibly avoid a serious prison term if he backs out and reports the others. He should consult with criminal defense counsel immediately to try to work out the best deal possible.
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