FINRA handed out suspensions and a lifetime ban to members of a Chicago-based brokerage team for staging a market manipulation scheme. The regulator announced sanctions against three former employees of Meyers Associates for a litany of offenses involving manipulating the market for common stock of IceWEB, an Internet service provider.

The broker said to have orchestrated the scheme, George Johnson, was barred from the securities industry for life. His supervisor Christopher Wynne was suspended from working in the industry in any capacity for two years. Wynne was also fined $25,000 and barred for life from working as a principal. A third member of the team, Joseph Mahalick was fined $20,000 and suspended for six months for falsifying records. Mahalick was barred from the industry earlier this year for a separate matter related to his work with a different securities firm.

Johnson, Wynne and Mahalick consented to FINRA's findings, but settled the matter without admitting or denying guilt. The three brokers could not be reached for comment.

Officials from Meyers Associates did not immediately respond to a request for comment.

The regulator's investigation found that Johnson artificially inflated IceWEB's trading price by convincing some clients to buy shares of the stock and others to sell over an eight-day period in May 2012. To do so, he often matched the orders of his own customers in what FINRA calls a "willful violation" of the Securities Exchange Act.

FINRA determined that Johnson's motive in pumping up the stock was the expectation that he would receive compensation from the issuer through a planned future private offering.

"Any broker engaging in manipulative activity poses a threat to market integrity and has no place in the securities industry," said Brad Bennett, executive vice president and chief of enforcement at FINRA in a statement.

FINRA also found that Johnson and Wynne sent customers sales materials about IceWEB while failing to disclose conflicts of interest and pertinent risks about the company. Those materials, FINRA charged, "contained misleading, exaggerated and unwarranted information."

The brokers were also charged with falsifying information on more than 100 order memoranda in a bid to cover up the market manipulation activity.

Bennett had harsh words for Wynne for failing to keep the activities of the branch office above board.

"The branch office manager, who was the first line of defense in supervising George Johnson's activities, completely failed to supervise his transactions to ensure compliance with securities laws and FINRA rules," Bennett said.

Meyers Associates has come under FINRA scrutiny in the past. In December 2008, the brokerage firm consented to a censure and fine for failing to keep adequate records, and for engaging in an improper public offering and selling unregistered securities last year.

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