Yesterday, the Securities and Exchange Commission announced administrative proceedings against New York-based brokerage firm Windsor Street Capital (formerly named Meyers Associates L.P.)  and its former anti-money laundering officer John D. Telfer.

Meyers Associates L.P. changed their name to Windsor Street Capital in September 2016. Windsor Street is a full-service boutique investment banking firm offering services including “reverse mergers” and “market making in a select list of over-the-counter securities”. 

The SEC’s Enforcement Division alleges that Meyers Associates failed to file Suspicious Activity Reports (SARs) for $24.8 million in suspicious transactions, including those occurring in accounts controlled by microcap stock financiers Raymond H. Barton and William G. Goode.

Yesterday, Barton and Goode (co-founders and former co-managing directors of Peachtree Capital, “a purported financier of microcap companies”) were separately charged by the SEC with conducting a pump-and-dump scheme. Also charged with Barton and Goode are Matthew Charles Briggs, Kenneth Manzo, and Justin Sindelman.

The SEC’s Enforcement Division alleges that Meyers Associates should have known about the suspicious circumstances behind many transactions occurring in customer accounts.  Customers like Barton and Goode allegedly deposited large blocks of penny stocks, liquidated them typically amid substantial promotional activity, and then transferred the proceeds away from the firm.

The SEC’s Enforcement Division further alleges that the shares deposited by Barton and Goode could not be sold legally because no registration statement was in effect and no registration exemption was available. Rather than conduct a reasonable inquiry into the deposits, Meyers Associates allegedly accepted registration exemption claims by Barton and Goode at face value.

“The SEC’s Broker-Dealer Task Force AML initiative is focused precisely on the conduct charged against Meyers Associates, which we allege systematically flouted its obligations under the securities laws to report suspicious activity,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office and Co-Chair of the Enforcement Division’s Broker-Dealer Task Force.  “We allege that when other brokerage firms were rejecting similar deposits by Barton and Goode, Meyers Associates not only effectuated their illegal stock sales but then failed to report them as required by law.”

See the SEC’s press release HERE

See the full Barton/Goode compliant HERE

See the full Windsor Street/Meyers complaint HERE.