Bloomberg News

Finra Seeks Order Against John Carris for Stock Sale Tactics (1)

September 30, 2013

Wall Street’s self-funded regulator is seeking an order to stop John Carris Investments LLC and its founder from selling stock in Fibrocell Science Inc. without proper disclosures.

John Carris “fraudulently solicited its customers” to buy Fibrocell shares in May without telling them that Chief Executive Officer George Carris and another principal were selling their holdings in the biotechnology company, the Financial Industry Regulatory Authority said today in a statement. Fibrocell, (FCSC:US) an Exton, Pennsylvania-based cell therapy research firm, completed a $45.1 million public offering last week.

Finra also issued an amended complaint alleging that the New York-based securities firm and CEO Carris “artificially inflated” Fibrocell’s stock price by engaging in pre-arranged trading and making unauthorized purchases from customers’ accounts.

George Carris and the firm also fraudulently sold stock in Carris’s parent company, Invictus Capital Inc., without disclosing its financial condition and paid dividends to early investors “with funds contributed by new investors in a Ponzi-like manner,” Finra said. John Carris continues to solicit backers for Invictus, Finra said, describing the investment as “wholly unsuitable.”

Tattoo Expenses

The securities firm also paid personal expenses for George Carris, including tattoos, pet care and a motorcycle, without properly reporting them, and failed to remit “hundreds of thousands of dollars” in employee payroll taxes to the government, Finra said.

Messages left for John Carris Investments and its CEO seeking comment weren’t immediately returned. A Fibrocell spokesman declined to comment.

Fibrocell rose (FCSC:US) 2.8 percent to close at $4.38 in New York. The shares have gained 17 percent this year, compared with the 26 percent advance of the Russell 2000 Index.

To contact the reporter on this story: Keri Geiger in New York at kgeiger4@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; Christine Harper at charper@bloomberg.net


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Companies Mentioned

  • FCSC
    (Fibrocell Science Inc)
    • $2.58 USD
    • 0.20
    • 7.75%
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