Securities Brokers Required to Disclose Bonus Commissions

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Hampton Porter Investment Bankers, LLC, was a registered securities broker-dealer whose owners and top-level managers were found to have engaged in a “pump and dump” scheme. According to the U.S. Court of Appeals for the Ninth Circuit, certain publicly traded companies granted Hampton Porter (or its owners) large blocks of free, or deeply discounted, stock. In return, Hampton Porter drove up the price of these thinly traded stocks by pressuring clients into purchasing shares, by discouraging clients from selling shares, and by refusing in some instances to execute clients’ sales orders. In the meantime, Hampton Porter sold its shares at artificially inflated prices.

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