According to Finra, John Carris Investments LLC was expelled from Finra membership. The sanctions were based on Finra findings that the firm and George William Carris "willfully violated Securities Exchange Act of 1934 Section 10(b) and Rule 10b-5 thereunder by knowingly or, at a minimum, recklessly selling securities issued by the firm's parent company on the basis of false statements of material fact and misleading omissions of material fact."
Finra concluded the firm and Carris "committed securities fraud and defrauded customers in connection with the sale of securities issued by the firm's parent company by failing to disclose the poor financial condition of the firm and its parent company, failing to disclose that Carris used firm funds for personal expenses, and misleading investors regarding the parent company's financial condition by paying dividends to the parent company's early investors with funds contributed by new investors."
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Carris was barred from association with any Finra member firm in any capacity.
Additionally, Andrey V. Tkatchenko, a registered representative at John Carris Investments, was assessed a deferred fine of $10,000 and suspended from association with any Finra member in any capacity for two years. Jason Christian Barter, head trader at John Carris Investments, was assessed a deferred fine of $5,000, suspended from association with any Finra member in any capacity for 18 months, and required to requalify by examination as a registered representative.