UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC LITIGATION RELEASE 23129; NOVEMBER 7, 2014: THE SEC HAS CHARGED AN ATTORNEY AND TWO INDIVIDUALS BEHIND A PUMP-AND-DUMP SCHEME THAT DEFRAUDED INVESTORS IN A BOSTON-BASED TICKET BROKERING BUSINESS. THE SEC ALLEGES THAT THE ATTORNEY FACILITATED A SCHEME TO PUMP AND DUMP THE STOCK OF A COMPANY, WHICH HE HELPED STRUCTURE INTO A PUBLICLY TRADED COMPANY THROUGH REVERSE MERGERS. THE ATTORNEY CREATED BACKDATED PROMISSORY NOTES AND AUTHORED FALSE LEGAL OPINION LETTERS THAT ENABLED COLEMAN FLAHERTY AND ANOTHER INDIVIDUAL TO OBTAIN MILLIONS OF PURPORTEDLY UNRESTRICTED SHARES OF STOCK IN THE COMPANY. INVESTORS WERE THEN BLITZED WITH A FALSE AND MISLEADING PROMOTIONAL CAMPAIGN TOUTING THE COMPANY AS A BUDDING NATIONAL LEADER ON THE VERGE OF ACQUIRING SMALLER TICKET FIRMS ACROSS THE COUNTRY AND POSITIONING ITSELF AS AN ATTRACTIVE TAKEOVER TARGET FOR TICKETMASTER. AS THE COMPANY'S STOCK PRICE INCREASED ON THE FALSE HYPE, FLAHERTY AND THE OTHER INDIVIDUAL SOLD THEIR SHARES TO UNSUSPECTING INVESTORS FOR ILLICIT PROCEEDS OF APPROXIMATELY $3 MILLION, AND THE ATTORNEY WAS WELL-COMPENSATED FOR HIS ROLE IN THE SCHEME. SHORTLY THEREAFTER, THE MARKET FOR THE COMPANY STOCK COLLAPSED AND IT EVENTUALLY WENT OUT OF BUSINESS. IN A PARALLEL CASE, THE U.S. ATTORNEY'S OFFICE FOR THE DISTRICT OF MASSACHUSETTS HAS ANNOUNCED CRIMINAL ACTIONS AGAINST FLAHERTY, THE ATTORNEY AND THE OTHER INDIVIDUAL. ACCORDING TO THE SEC'S COMPLAINT FILED IN FEDERAL COURT IN BOSTON, ALL OF THE FALSE PROMOTIONS PAINTED A ROSY, OPTIMISTIC PICTURE OF A COMPANY THAT WAS ACTUALLY IN DIRE FINANCIAL STRAITS. FOR EXAMPLE, ONE PROMOTIONAL ALERT FALSELY CLAIMED THAT THE COMPANY WAS "IN THE PROCESS NOW OF SWALLOWING UP 5 SMALLER TICKET RESELLERS THAT COULD SEND NEXT YEAR'S PROFITS THROUGH THE ROOF." IN REALITY, THE COMPANY LACKED THE MEANS FOR SUCH ACQUISITIONS. THE ALERT FURTHER EMBELLISHED THAT THE COMPANY'S GROWTH FROM PURPORTEDLY SWALLOWING UP SMALLER FISH IN THE TICKET-SELLING MARKET WOULD MAKE THE COMPANY "AN IRRESISTIBLE TAKEOVER TARGET FOR TICKETMASTER, THE BIGGEST FISH OF ALL." THE ALERT ESTIMATED THAT A TICKETMASTER ACQUISITION OF THE COMPANY "COULD EASILY JUMP THIS UNDER-50-CENT STOCK TO $2.50 - $3.50 OVERNIGHT." THE SEC'S COMPLAINT ALLEGES THAT ALL DEFENDANTS VIOLATED THE ANTIFRAUD PROVISIONS OF THE SECURITIES LAWS IN SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5(A) AND (C) THEREUNDER, AND SECTION 17(A)(1) AND (3) OF THE SECURITIES ACT OF 1933. THE COMPLAINT FURTHER ALLEGES THAT THE ATTORNEY AIDED AND ABETTED FLAHERTY'S AND THE OTHER INDIVIDUAL'S VIOLATIONS OF SECTION 10(B) OF THE EXCHANGE ACT AND THAT THE ATTORNEY ALSO VIOLATED RULE 10B-5(B) THEREUNDER AS WELL AS SECTION 17(A)(2) OF THE SECURITIES ACT. FINALLY, THE COMPLAINT CHARGES ALL DEFENDANTS WITH VIOLATIONS OF SECTION 5(A) AND 5(C) OF THE SECURITIES ACT. AS RELIEF, THE SEC SEEKS DISGORGEMENT OF ILL-GOTTEN GAINS PLUS PRE-JUDGMENT INTEREST AND PENALTIES AS WELL AS PENNY STOCK BARS AND PERMANENT INJUNCTIONS AGAINST FURTHER VIOLATIONS OF THE SECURITIES LAWS.

Judgment Rendered

Disgorgement

$1,350,734.00

Injunction

penny stock bar

Conspiracy

Pled guilty

Securities Fraud

Pled guilty

Wire Fraud

Pled guilty

NASD

RESPONDENT IS SUSPENDED PURSUANT TO THE PROVISIONS OF RULE 9552 SERIES NON-SUMMARY SUSPENSION SANCTION.

Other

Bar

PURSUANT TO NASD PROCEDURAL RULE 9552(H) AND IN ACCORDANCE WITH THE NOTICE OF INTENT TO SUSPEND AND NOTICE OF SUSPENSION DATED MARCH 28, 2006 AND APRIL 24, 2006, RESPECTIVELY, ON OCTOBER 4, 2006, RESPONDENT IS BARRED FROM ASSOCIATION WITH ANY NASD MEMBER IN ANY CAPACITY.

IOWA SECURITIES BUREAU

FLAHERTY ACTED AS AN UNREGISTERED AGENT IN IOWA IN VIOLATION OF IOWA CODE SECTION 502.301 (1), A PROVISION UNDER THE IOWA UNIFORM SECURITIES ACT.

Order

Cease and Desist/Injunction

THE ORDER BECAME FINAL BY OPERATION OF LAW.

I INHERITED A ACCOUNT FROM THE BRANCH WHEN THE MANAGER HAD THE ACCOUNT I WAS NOT REGISTERED IN STATE. WHEN I DID BUSINESS WITH THE CLIENT I WAS REGISTERED IN STATE.

FAILURE TO EXECUTE TRADE. ALLEGED DAMAGES WERE $4,500

$4,500.00

$4,395.13

SETTLEMENT OF CUSTOMER FOR $4,500 OF WHICH I DID NOT CONTRIBUTE [CUSTOMER] ASKED ME TO SELL A SECURITY FORM HIM AND WHEN I TRIED TO SELL STOCK, THE TRADER IN MY FIRM REFUSED TO EXECUTE TRADE

ALLEGATION OF ACCOUNT RELATED FAILURE TO SUPERVISE.

$7,000.00

$7,917.00

AWARD OF $7,800 IN FAVOR OF CUSTOMER. [CUSTOMER] TRANSFERRED TO INVESTORS ASSOCIATES TWO SPECULATIVE SECURITIES FROM A SMALLER SPECULATIVE FIRM. AFTER PURCHASING A FIRM RECOMMENDED SECURITY THAT DECREASED IN VALUE [CUSTOMER] FILED A ARBITRATION I DENY ALL ALLEGATIONS.

MASSACHUSETTS SECURITIES DIVISION

BASED ON OCCURRENCES DISCLOSED TO THE CRD, INCLUDING ALLEGATIONS OF UNAUTHORIZED TRADING, AN ORDER WAS ENTERED APPROVING FLAHERTY SUBJECT TO CERTAIN CONDITIONS.

Order

A CONDITIONAL REGISTRATION ORDER WAS ENTERED ON DECEMBER 12, 1994.

NOT PROVIDED