Finra expels Hallmark Investments and bars CEO for fraud

Head of New York-based firm led scheme to sell shares at inflated prices, says regulator

Aug 14, 2017 @ 1:54 pm

By InvestmentNews

Finra has expelled New York-based Hallmark Investments, Inc. and barred its CEO Steven G. Dash, in connection with a scheme to sell shares of stock to customers at fraudulently inflated prices.

The Financial Industry Regulatory Authority Inc. also suspended Hallmark representative Stephen P. Zipkin for two years and required him to pay more than $18,000 in restitution to affected customers. According to Finra's BrokerCheck, at least 53 people maintained their broker registrations through Hallmark at some point.

Finra said in a release that it found that Hallmark, Mr. Dash and Mr. Zipkin used manipulative trading and misleading trade confirmations to sell nearly 40,000 shares of Avalanche company stock that the firm owned to 14 customers at fraudulently inflated prices.

At Mr. Dash's direction, Finra said, Hallmark used a pre-arranged trading scheme to sell these shares to the customers at $3 per share when the public offering price for the shares was just $2.05 per share. Hallmark sold Avalanche shares to other customers at prices as low as 80 cents, Finra said.

Neither Hallmark nor Messrs. Dash and Zipkin ever disclosed to the customers that the shares they were purchasing belonged to Hallmark, that the firm was charging extraordinary mark-ups on the transactions, that the firm was selling Avalanche shares to other customers during the same period at much lower prices, or that the shares could be purchased for substantially less on the open market, Finra said.

In addition to the charges related to Avalanche stock trading, Hallmark and Mr. Dash were charged with failing to respond to numerous requests from Finra for documents and information, and failing to maintain required minimum net capital.

In settling this matter, the firm and Messrs. Dash and Zipkin neither admitted nor denied the charges, but consented to the entry of Finra's findings.


What do you think?

View comments

Recommended for you

Featured video


4 secrets to adviser growth: Client experience

The client experience is critical for firms to thrive today. This is especially true for your wealthiest clients. SEI's John Anderson and Allie Carey offer some strategies for success.

Latest news & opinion

Top 10 RIAs in the Northeast

These are the largest registered investment advice firms in the Northeastern U.S., in terms of assets under management.

10 predictions for financial advice in 2019

Deloitte expects these 10 changes will hit the financial advice business in 2019.

Midwestern magic? RIA assets soared nearly 30% there last year

Theories for what's driving the growth spurt abound, but it surpassed all other regions of the country.

8 apps advisers love for getting stuff done

We reached out to advisers to find out which apps they are using to run their business more efficiently.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print