U.S. Judge Fines Ex-Waldron Chief in Stock Scheme

A federal judge has imposed $110,000 in civil penalties against Cery B. Perle, part owner and former president of the now-defunct Irvine brokerage Waldron & Co., for his role in manipulating the stock of Corona del Mar online retailer Shopping.com.

U.S. District Judge Dickran Tevrizian this week ruled that Perle, who held a one-third interest in Waldron and controlled its operations, inflated Shopping.com’s stock through illegal practices that brought in profits of $4.1 million for the brokerage. Tevrizian enjoined Perle from further securities-law violations.

“The judge’s ruling essentially means that he can’t work for a member of the National Association of Securities Dealers and thus can’t be a broker,” said Clifford Hyatt, Los Angeles branch chief for the Securities and Exchange Commission.

Perle’s attorney did not return calls for comment.

The SEC initially planned to seek civil penalties against Waldron, but the brokerage has been dissolved. Perle’s legal troubles continue, however: He faces an arbitration with at least two former clients, Hyatt said.

Waldron was the lead underwriter that took Shopping.com public in November 1997, raising $11.7 million for the company. By late March, the stock had climbed 255%.

The judge found that much of that gain stemmed from Waldron’s control of 94% of the 1.3 million publicly traded shares.

Perle and Waldron masked the size of their holdings by distributing the shares across several accounts, some of them fictitious. They also executed unauthorized trades and “parked” stock in customers’ accounts without their knowledge or approval, Tevrizian found.

On several occasions, Waldron used accounts of customers to buy Shopping.com stock even after they had explicitly said they did not want to make the deal, the judge found. Clients testified that Waldron and Perle refused to sell stock that had been placed without customers’ permission in their accounts.

Waldron representatives were also penalized if customers sold their Shopping.com stock and they could not find another Waldron customer to buy it.

Perle and Waldron also issued false and misleading press releases urging investors to buy Shopping.com stock without disclosing that Waldron was also Shopping.com’s largest customer in its 1998 fiscal year, Tevrizian found.