Broker wouldn't sell BB orders LOL
Former Stockbroker Admits Role In $7 Million Fraud
POSTED: 11:03 am EDT May 20, 2005
NEWARK, N.J. -- A former stock broker pleaded guilty Thursday to participating in a stock manipulation and kickback scheme that federal agents said cost investors more than $7 million.
The investigation into brokerages where Joseph Ferragamo worked from 1999 to 2002 is continuing, federal prosecutors said.
Ferragamo, 36, of Staten Island, N.Y., worked at L.H. Ross & Co. in Manhattan; Valley Forge Securities of Staten Island and Manhattan (also known as Bryn Mawr Investment Group); and Yankee Financial in Brooklyn, N.Y.
In pleading guilty to three charges -- wire fraud, securities fraud and conspiracy -- Ferragamo admitted that while at each of the firms he got commissions ranging from 30 percent to 70 percent of the prices to sell certain bulletin-board stocks, low-priced stocks that are thinly traded.
Tactics used by Ferragamo and others included exaggerating the expected profits from the stocks, using money in clients' brokerage accounts to buy the stocks without permission and refusing requests to sell the stocks, prosecutors said.
Ferragamo remains free on $1 million bail pending Sept. 14 sentencing before U.S. District Judge William H. Walls. The mail fraud count carries the harshest penalty, up to 20 years in prison and a fine of up to twice the profits to himself or loss to victims.
The investigations were conducted by federal prosecutors in Newark, Manhattan and Brooklyn, along with the Securities and Exchange Commission, the FBI and the New Jersey Bureau of Securities.
© 2005 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Pennies not a zero sum game as much as some zero game.
