33 Charged in $100-Million Brokerage Fraud Case
A.S. Goldmen & Co., a defunct brokerage, and 33 of its executives and employees were charged by New York and federal authorities Thursday with manipulating small-company public offerings, costing investors $100 million in trading losses.
Manhattan Dist. Atty. Robert Morgenthau brought criminal charges against New Jersey-based Goldmen; its president, Anthony J. Marchiano; a Goldmen financial principal and former supervisor for the National Assn. of Securities Dealers, Stuart E. Winkler; and a group of former brokers.
The indictments covered 240 counts, including charges of enterprise corruption, scheming to defraud investors, possession of stolen property and money laundering. The individuals face up to 25 years in prison each.
The Securities and Exchange Commission also charged the firm, Marchiano and Winkler in a civil case with manipulating shares in at least six stock offerings the brokerage underwrote from 1994 to 1998.
In its heyday, Goldmen had offices in Los Angeles; Manhattan; Naples, Fla.; and Iselin, N.J., with nearly 100 brokers and 50,000 accounts. The firm was created in 1988 and shut down last fall.
The New York district attorney’s office alleges that Winkler, who was a field supervisor in the NASD’s New York office about 20 years ago, helped Goldmen conceal its misdeeds from regulators.
The charges stem from the firm’s sale of 10 securities: Millennium Sports Management, Stadium Capital, Independence Brewing, Imatec, Wanderlust Interactive, Winfield Capital, Veritas Music Entertainment, Nickelodeon Theatre, Cinema Ride and Innovative Tech Systems.
In its complaint, the SEC alleged that the firm, Marchiano and Winkler sold 3 million unregistered shares of Millennium Sports, raising $7.5 million. Goldmen’s Florida office then became a “boiler room” that used aggressive sales practices to sell the shares, the SEC alleged.
The SEC also charged six other former brokers who worked in Goldmen’s Florida or New Jersey offices with securities violations.
According to the SEC, Goldmen, Marchiano, Winkler and the other brokers participated in five stock fraud schemes from 1994 to 1998.
Lawyers for the firm and defendants either could not be reached for comment or did not return calls.
