Meyers Associates, L.P. (the firm) and Bruce Meyers of New York, New York were subject to disciplinary action from the Financial Industry Regulatory Authority (FINRA) for allegedly misleading prospective investors in connection with claims surrounding a medical drug company. Meyers Associates has been a FINRA member since 1994 and has faced 10 FINRA disciplinary actions similar to this case. Mr. Meyers, cofounder of the firm, entered the securities industry in 1982 and acted as a General Securities Representative (GSR) and General Securities Principal (Principal).
Between May 2008 and September 2011, Meyers Associates began to raise between $1.5 million and $6 million for SignPath Pharma, Inc. (SignPath) through a private offering of convertible preferred stock and warrants. SignPath had not generated revenue and had an accumulated deficit of over $13.4 million. Meyers Associates and Mr. Meyers collectively owned more than 60 percent of shares in SignPath’s common stock during which time Mr. Meyers sent over 1,037 emails about SignPath to potential investors with whom he had no pre-existing or substantive relationship.
FINRA filed disciplinary actions and issued a decision that Meyers Associates and Mr. Meyers sent misleading information to investors. FINRA found Mr. Meyers made material omissions to prospective investors in SignPath. Most notably, FINRA alleged that Mr. Meyers failed to disclose SignPath’s history of significant losses, anticipated lack of revenue, lack of manufacturing experience as well as changes in the drug industry that could affect the company. Furthermore, FINRA alleged that Mr. Meyers made exaggerated claims about the future of SignPath and failed to disclose his relationship with SignPath.
FINRA found that Mr. Meyers and Meyers Associates violated NASD Rule 2210 and FlNRA Rules 2210 and 2010 for their alleged misconduct. Meyers Associates was ordered to pay a $700,000 fine and Mr. Meyers was barred from association with any FINRA member in any capacity and ordered to pay a $75,000 fine.
FINRA rules require brokerage firms to establish and implement a reasonable supervisory system to protect customers from the risks associated with investing. The implementation of the rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers and their supervisors fail to establish and implement these protective measures, they may be held liable to account holders for investment losses which stem from their employees’ misconduct. Therefore, investors who have suffered losses due to a brokerage firm’s failure to supervise the unsuitable recommendations of its representatives can bring forth claims to recover damages against firms, like Meyers Associates, which have a duty to supervise employees in order to protect their customers’ interests.
Have you suffered losses in your Meyers Associates account due to a broker or firm misleading its customers? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against Meyers Associates stockbrokers who may have engaged in misconduct and caused investors losses.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 40 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.