Securities Law Blog

On Thursday April 29, 2010 the Financial Industry Regulatory Authority (FINRA) permanently barred Tom Bretton from the securities industry for his alleged involvement in a $1.3 million fraud. The former Chief Compliance Officer and Head Trader in the Garden City, NY office of Prestige Financial, Inc. was accused of running a fraudulent trading scheme that imposed improper charges on his clients’ trades, according to the FINRA report.

Allegedly from September 2006 through June 2009, Bretton placed large customer orders, typically of 1,000 shares or more, through a firm proprietary account instead of effecting the trades through the customers’ accounts. For securities being purchased, Bretton allegedly increased the price per share by $.02 to $.05 before allocating the shares to the customers’ accounts. For securities being sold, Bretton allegedly decreased the price by $.02 to $.05 before allocating proceeds to customer accounts. FINRA found that these findings were never authorized by or disclosed to the customers.

According to FINRA, Bretton allegedly concealed his fraud by entering false information on the corresponding order tickets regarding the share price and the time the customer order ticket was received, entered and executed.

The scheme generated $1.3 million in profits for the proprietary accounts, of which Bretton received 33% interest, equaling a payday of $429,000.