The U.S. Securities and Exchange Commission on May 20 denied a request by a former Rye Brook broker-dealer and its founder to stop enforcement of sanctions against them while the agency reviews a disciplinary proceedings.
The Financial Industry Regulatory Authority had fined NYPPEX LLC and founder Laurence G. Allen, suspended the firm and banned Allen from associating with any members, in effect, stopping them from doing business.
On May 7, Allen asked the SEC to review FINRA’s findings and suspend the sanctions while a review of their misconduct is pending.
His request “represents the mere skeleton, if that much, of a proper motion for a stay,” the SEC ruled.
NYPPEX was based in Rye Brook and now operates in Lansing, Michigan. Allen lives in Greenwich, Connecticut.
The dispute stems back to 2019 when New York Attorney General Letitia James sued Allen and his businesses in Manhattan Supreme Court for allegedly defrauding investors and misappropriating more than $13 million.
In 2021, a Manhattan Supreme Court judge found Allen and NYPPEX liable for securities fraud and ordered them to disgorge $7.9 million in ill-gotten gains.
Then FINRA accused them of misconduct. In 2022 the organization expelled NYPPEX from its membership, barred Allen from associating with any members, and fined them.
Allen and NYPPEX appealed FINRA’s findings and sanctions. On April 8, the organization modified its findings but upheld a NYPPEX suspension for one year, a bar on Allen’s associating with any members, and a fine.
