Stock Show Host Faces Suspension
Gene R. Morgan, a stock promoter and host of a daily market-commentary show on Southland TV station KWHY (Channel 22), may find himself off the air for 45 days because of sanctions ordered by brokerage industry regulators.
Morgan’s Los Angeles-based firm Gene Morgan Financial has underwritten small-stock offerings since 1984, some of them controversial. Last May, Morgan was hit with a $50,000 fine and six-month suspension for allegedly misrepresenting a stock he sponsored and also touted on his half-hour “Charting the Market” show, seen weekdays at 1:30 p.m. Morgan buys the air time.
Morgan appealed the sanctions, imposed by the Los Angeles regional business conduct committee of the National Assn. of Securities Dealers, to the NASD’s national business conduct committee. In a decision issued Jan. 3 and recently made public, the national committee reduced Morgan’s suspension to 45 days but upheld the $50,000 fine and other disciplinary measures.
Morgan still could appeal to the Securities and Exchange Commission. But his attorney, Arthur Selander, said he is advising Morgan, 70, to accept the revised NASD decision. “I think at this point he wants to put the matter behind him,” Selander said.
The case involved a Utah-based developer of giant-screen theaters called International Tourist Entertainment Corp. Morgan promoted the stock on his TV show before underwriting it in December, 1992. The NASD found that Morgan made on-the-air claims about ITEC “that contained untrue statements of material facts or were otherwise exaggerated, false or misleading.”
The NASD has ordered Morgan to requalify as a broker and for six months to file all ads and sales material with the NASD prior to use.
But although the NASD decision does not allow Morgan to associate with the brokerage industry “in any capacity” for 45 days, Selander is hoping to convince the NASD that Morgan should be allowed to stay on TV during the suspension. The regional NASD committee, however, disagrees. “This TV show is advertising” for Gene Morgan Financial, said Lani M. Sen Woltmann, NASD district director. A decision by the national NASD committee is pending.
