An irreverent Wall Street Blog
by Bill Singer
by Bill Singer
Thunderation, What's The Matter With Lead Bullets?
July 11, 2014
A fiery regulator with a speed of light. A cloud of dust. And a hearty Hi Yo FINRA! Come back with me to the days of old as a FINRA posse blazes across the Wall Street plains in furious pursuit of fiendish fiends and not-so fiendish fiends and a passel of bumbling idiots.
Cue The Lone Ranger Theme (Oh, yeah, sure, like anyone ever calls it the "William Tell Overture" from Rossini's opera "William Tell.")
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Mark Steven Garrison submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Mark Steven Garrison, Respondent (AWC 2012031996001, June 30, 2014).
In 1989, Garrison registered with NYLIFE Securities LLC in 1989. He has Series 6, Series 22 and Series 63 licenses. The AWC asserts that he had no prior disciplinary history.
Silver . . . that would be a name for him
Atlantic Bullion & Coin Inc. ("AB&C") was a purported investment company offering interests in a program that bought and sold physical silver. If you went by the 2008 to 2012 account statements, you would have outperformed the market for the commodity - but for the fact that the account statements were garbage and the program a fraud. Yeah, minor details.
Kemosabe
Garrison touted investors on AB&C, noting that in 2008 he had put his own dollars into the program and had done well. Thereafter, Garrison persuaded some 16 investors to pool their funds through the "Silver Bullets" partnership and collectively invest in AB&C. In furtherance of that solicitation, Garrison collected the funds and purchased interests in AB&C.
Eventually, Garrison managed to facilitate the sales of AB&C interests to some 28 investors (five of whom were his NYLIFE customers who invested $188,500) for a total investment of $864,375. Garrison netted a tidy $17,043.57 in commission payments from the investment company.
A Lone Ranger
Garrison did not notify NYLIFE or obtain NYLIFE's approval prior to participating in private securities transactions involving AB&C, in violation of NASD Rule 3040, NASD Rule 2110 and FINRA Rule 2010. Further, the recommendation of investment in AB&C to five of his NYLIFE customers was purportedly made without Garrison undertaking adequate due diligence because he failed to review any of AB&C's trading records, financial statements, marketing material, or any of the physical silver that AB&C had purportedly stored in a warehouse - moreover, he purportedly failed to adequately research or understand AB&C's purported investment strategy, including how AB&C was able to significantly outperform the market for physical silver. FINRA deemed such conduct to constitute violations of NASD Rule 2310 and FINRA Rule 2010.
Who Was That Masked Man?
According to online FINRA records as of July 11, 2014, on December 17, 2012, NYLIFE had received a customer complaint seeking $72,168.54 in damages, and, thereafter, the customer withdrew the claim on February 11, 2013. NYLIFE asserted that the customer alleged:
CUSTOMER ALLEGES THAT HE INCURRED LOSSES AFTER HE INVESTED IN A "SILVER PROGRAM" THROUGH ATLANTIC BULLION & COIN, A NON-AFFILIATED ENTITY WHICH THE RR TOLD HIM ABOUT. . ATLANTIC BULLION & COIN WAS NOT AN INVESTMENT APPROVED BY THE FIRM.
On September 11, 2013, NYLIFE had received a customer complaint seeking $310,000 in damages, and, thereafter, the firm denied the customer claim on October 22, 2013. NYLIFE asserted that the customer alleged:
CUSTOMER ALLEGES HE INCURRED LOSSES BASED ON THE RR'S RECOMMENDATIONS TO TAKE LOANS FROM HIS TRADITIONAL WHOLE LIFE INSURANCE POLICIES TO INVEST IN A NON-NEW YORK LIFE INVESTMENT("SILVER PROGRAM" THROUGH ATLANTIC BULLION & COIN). ATLANTIC BULLION & COIN WAS NOT AN INVESTMENT APPROVED BY THE FIRM AND WAS DETERMINED TO BE A PONZI SCHEME
On March 13, 2014, NYLIFE had received a customer complaint seeking $21,000 in damages, and, thereafter, the firm denied the customer claim on April 4, 2014. NYLIFE asserted that the customer alleged:
THE CUSTOMER ALLEGES SHE WAS DEFRAUDED IN OR AROUND AUGUST 2011 UPON THE RR'S RECOMMENDATION TO INVEST IN A NON-NEW YORK LIFE INVESTMENT SCHEME WHICH INVOLVED THE PURCHASE OF SILVER OFFERED AND SOLD BY ATLANTIC BULLION & COIN, INC. ("AB&C")
Hi Yo Silver!
Online FINRA records disclose that NYLIFE Securities "Discharged" Garrison on April 28, 2012, based upon allegations:
MR. GARRISON WAS TERMINATED AFTER HE ACKNOWLEDGED THAT HE ENGAGED IN AN UNAPPROVED INVESTMENT WITHOUT THE COMPANY'S KNOWLEDGE. MR. GARRISON INVESTED HIS OWN MONEY AND REFERRED OTHER PUBLIC CUSTOMERS TO INVEST IN A "SILVER PROGRAM" THROUGH ATLANTIC BULLION & COIN, A NON-AFFILIATED ENTITY, WHICH RECENTLY WAS NAMED IN A CIVIL COMPLAINT FILED BY THE SOUTH CAROLINA COMMISSIONER OF SECURITIES ALLEGING THAT ATLANTIC BULLION & COIN ENGAGED IN A FRAUDULENT SCHEME SELLING UNREGISTERED SECURITIES.
The online record further asserts that:
MR. GARRISON DENIED ANY KNOWLEDGE OF, OR INVOLVEMENT IN ANY ALLEGED FRAUDULENT SCHEME PERPETRATED BY ATLANTIC BULLION & COIN.
Me Shoot Him?
In accordance with the terms of the AWC, FINRA imposed upon Garrison a $37,043.57 fine (includes $17,043.57 commission disgorgement plus interest) and a 14-month suspension from association with any FINRA member in any capacity.
Silver Bullets
- CFTC v. Atlantic Bullion & Coin, Inc. and Ronnie Gene Wilson (DSC, 12-CV-01503, February 27, 2013)
- USA v. Ronnie Gene Wilson and Atlantic Bullion & Coin, Inc. (Information, DSC, 12-CR-00320, April 11, 2012)
A special gift for BrokeAndBroker.com Blog readers. The entire FIRST EPISODE (1949) of the Lone Ranger television series. They just don't make 'em like this anymore. The black and white film. The stilted acting. The stilted dialog. The politically incorrect, racist comments. The good guys galloping after the bad guys, who have a five-hour-head-start. No GPS. No iPhones. No bottled water. No Uber to call after all the horses are shot and you need to get the hell out of the ambush. Here are some memorable lines:
New Episode by Bill Singer, who clearly has far too much time on his hands.
- He alone of the six Texas Rangers still lives.
- Kemosabe, it mean trusty scout.
- I'll hide my identity somehow. I'll wear a disguise of some sort. You mean like mask? That's it Tonto, for now on I'll wear a mask.
- Here, hat, me wash in stream, dry in sun, make whiter. Thanks Tonto. Here gun to kill bad men. I'm not going to do any killing. You not defend yourself? Oh, I'll shoot if I have to, but I'll shoot to wound, not to kill. A man must die, that's up to the Law to decide that, not the man behind the six shooter.
- Yes, Tonto, I am a Lone Ranger.
- Buffalo dying, horse look bad, me shoot him?
- Him a beauty, like mountain of snow, silver white. Silver -- that would be a name for him. Here Silver. Come back big fellow.
- Then, in the future, whenever Tonto and I come back here we'll get the pure metal for money and bullets. Bullets? Yes, I want some of the ore cast into silver bullets. Thunderation, what's the matter with lead bullets? They'll kill just as well.
LONE RANGER: Jim, I'm here for another 60 bullets.JIM BLAINE: I'm not sure how to put this, but, this time, I have to charge you.RANGER: Charge me?BLAINE: Yeah, by criminy, you see I bought some silver futures to hedge our silver mine assets and the market sort of turned against us.RANGER:What do you mean "us"?BLAINE:Well, you know, you and me, kemosabe and all.RANGER: Don't kemosabe me, JimBLAINE: Now all of sudden I ain't no kemosabe of yours. I know Tonto too.RANGER: I know Tonto. Tonto is a friend of mine. You, Jim, are no Tonto.BLAINE: Okay, how about I pretend that I'm Lloyd Bentsen?RANGER: Is he riding with the Quayle gang?BLAINE: No.RANGER: Then stop calling me kemosabe.BLAINE: Okay, don't get all huffy on me. In any event, the spot market price for silver is $21.50 an ounce, you got an ounce of silver in each bullet, that's $21.50 times 60, which I figger is sumpthin' like $1,290 but let's round it up to an even $1,300 to cover my handling, and, for ol' times sake, I'll give you a discount. Howsabout we call it even at $1,000?RANGER: Jim, you smoking that Mexican grass again? You doing those funny mushrooms we used to pick in them thar hills? Did you recently take the stagecoach on a round trip to Denver?BLAINE: That depends. You askin' as my kemosabe or as a law enforcement agent with the Texas Rangers?RANGER: Look, I am not paying a thousand bucks for 60 silver bullets; and, anyways, I'm a part owner of the silver mine.BLAINE: Okay, tell you what, just cuz you're bringin' that part-owner thing up and throwin' it in my face and all, this one time only, you can have the 60 bullets for $500.RANGER: You're driving a hard bargain. You do realize that I have a gun and am wearing a mask, right? I could just as easily rob you and you'd never know who did it.BLAINE: And you do realize that I know you're John Reid, right?RANGER: Oh, yeah, I sort of forgot about that. Look, Jim, here's the thing, Tonto and I are a bit short this month. The shopping center appearances have been drying up. It's all Iron Man this and Spiderman that these days. No one seems to appreciate an Old Western hero anymore. Tell you what, let's go down to a half ounce of silver per bullet.BLAINE: Hmmm . . . listen John, sorry, Lone Ranger, what if we just do a full ounce of lead and I paint the thing silver. Work just as well. No one will ever know. I could do that for something like $20, just to cover my time and all.RANGER: Can I pay for that with PayPal?BLAINE: Sure . . . I'll even accept BitCoin.RANGER: Fine, I'll make the payment through my iPhone, but I'll need to recharge the battery first. Where's your outlet?BLAINE: Don't got no outlet. They ain't invented that electricity thing yet. Got no Wi-Fi or Internet either. We're still in the 19th Century.RANGER: Oh my, then we have a continuity problem.