An Edmond broker found to have committed “egregious” violations of short selling rules must pay a $900,000 fine and is banned from the securities industry.
The Oklahoma Department of Securities has banned Mark Alan Uselton, of Edmond, and Legacy Trading Co., a former registered broker-dealer operating from Edmond, from registering under the Oklahoma Uniform Securities Act of 2004 and from associating with a broker-dealer or investment adviser.
Jennifer Shaw, an enforcement attorney with the Oklahoma Department of Securities, said the case is final as far as the state agency is concerned. Uselton has been banned from the industry by the agency and the Financial Industry Regulatory Authority, which fined Uselton and his company.
In August 2009, a Financial Industry Regulatory Authority hearing panel expelled Legacy Trading Co. and permanently banned Uselton, the firm’s CEO and owner, from the securities industry for a wide range of misconduct including violations of short selling rules, failure to maintain required books and records and for providing false information and refusing to provide testimony to the FINRA, according to FINRA records. The accusations stem from more than 2,000 transactions in 2004 and 2005.
The hearing panel fined Legacy and Uselton, ruling that they made almost $900,000 in profits from the alleged short sales.
The hearing panel found that Legacy and Uselton provided false information to FINRA about a number of different issues, including the source of funds for a $300,000 capital contribution to the firm.
In addition, the hearing panel found that Legacy and Uselton falsely represented that the firm did not use e-mail for business purposes and falsely claimed that a bank account in the name of Legacy’s holding company was not related to Legacy’s business, when in fact it was used to pay virtually all of Legacy’s financial obligations.
The hearing panel found that Uselton initially refused to provide testimony to the FINRA and later provided false testimony regarding his and Legacy’s relationship with a firm relatives owned and operated. The panel found Uselton falsely claimed that neither he nor Legacy had any business relationships with that entity.
The panel found that Legacy and Uselton’s failure to maintain required books and records impeded the FINRA’s investigation into the firm’s activities, including its investigation into Legacy’s relationship with the entity Uselton’s father and cousin owned and operated.
For these reasons, the hearing panel expelled Legacy from the securities industry, permanently banned Uselton from working for a securities firm and fined both.
The FINRA filed its initial complaint against Legacy and Uselton in July 2007.