financial arbitration

Jose Miguel Abadin of Sherman Oaks California a shareholder and equity trader of Glendale Securities Inc. has been charged by Financial Industry Regulatory Authority (FINRA) Department of Enforcement in a Complaint alleging that Abadin’s activities caused the firm to effect unlawful securities sales. Department of Enforcement v. Jose Miguel Abadin, Disciplinary Proceeding No. 2016049565901 (Oct. 5, 2017).

According to the Complaint, the primary business activities of Glendale included the facilitation of customer deposits and customer liquidations of penny stocks and microcap securities. The firm was reportedly responsible for market making in the penny stocks and microcap securities. However, Abadin apparently failed to identify and take action concerning red flags pertaining to the firm’s penny stock business – conduct FINRA alleged violated FINRA Rules 2010 and 3310(a).

The Complaint stated that shares of BLMK, which had later been listed as NUGN, were sold by MF, EF and NF to customer A and customer B through a total of six share purchase agreements. Under Rule 144, those securities subject of the purchase agreements were not allowed to be sold by customer A and customer B until they had been held for six months.

The Complaint also reported that there was no registration statement pertaining to NUGN sales in effect between December 18, 2014 and June 17, 2015. The Complaint further stated there was no exemption from registration in effect concerning the resale of NUGN. As a result, FINRA contended that customer A’s and customer B’s sales predating June 9, 2015 amounted to non-exempt, unregistered resales of restricted securities; conduct violative of Securities Act of 1933 Section 5.

Abadin allegedly caused Glendale to effect a resale of 482,377 shares of restricted securities to the public marketplace because he approved of the NUGN transactions. FINRA Department of Enforcement alleged that the activities amounted to the unlawful sale of restricted securities, and that Abadin caused the firm to violate Securities Act of 1933 Section 5 and FINRA Rule 2010.

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