H.J. Meyers, 22 Brokers Fined $1.5 Million

H.J. Meyers & Co., a securities firm, and 22 of its current and former brokers were ordered to pay fines and investor refunds totaling $1.5 million for overcharging 3,000 customers, the National Assn. of Securities Dealers announced Thursday.

The owner and chief executive of the Rochester, N.Y.-based firm, James A. Villa, was fined $25,000, censured and suspended for 20 business days.

H.J. Meyers, which raises funds for small companies, neither admitted nor denied wrongdoing under the settlement. The fine was the fifth paid by the closely held firm to various regulators in the last decade, and the third paid by Villa.

The NASD, the industry body that polices all U.S. brokers, also censured the firm for charging excessive prices on seven stocks between 1990 and ’93.

Thursday’s penalties include a fine totaling nearly $500,000 against the firm and 22 current and former managers and brokers, and more than $1 million in refunds ordered for the 3,000 overcharged customers. Some of these customers have already had an additional $517,000 credited to their accounts as a result of overcharges.

The final refund total “may increase significantly,” based on accounting still in progress, the NASD said. The firm agreed to make all refunds within four months. H.J. Meyers also has agreed to hire an independent consultant to monitor the firm’s trading for a year, the NASD said.

The firm has 800 employees, of whom 490 are brokers, at 15 U.S. branch offices, including in California. It has acted as underwriter to 60 companies with assets of as much as $150 million in the last six years, said Michael F. Brown, H.J. Meyers general counsel.

The NASD said H.J. Meyers overcharged customers as much as 50% on the seven stocks, whose trading was dominated by the firm. More than 3,200 of these trades exceeded the market price by more than 10%, which constitutes fraud under NASD rules.

All the offenses cited by NASD occurred at Rochester-based Thomas James Associates, which acquired the Beverly Hills-based H.J. Meyers in March 1995 and continued operations under Meyers’ name, Brown said. Villa was Thomas James’ sole owner, and currently owns 99.5% of H.J. Meyers, he said.