WASHINGTON — The National Association of Securities Dealers on Thursday said it expelled brokerage firm L.H. Ross & Co., settling charges of widespread fraud centered on the questionable sales of risky securities to unsuspecting customers.
As part of the settlement, which ended months of appeals, the company's owner and president, Franklyn Michelin, was barred for life.
In August, the NASD first issued a cease-and-desist order against L.H. Ross, which is based in Boca Raton, Fla.
NASD accused the company of lying to potential investors, many of them elderly, by promising large returns if they invested in L.H. Ross' initial public offering. But L.H. Ross hadn't even taken steps toward a public offering, NASD said.
Though NASD went one step further by expelling the firm in January, L.H. Ross appealed both rulings, allowing it to temporarily avoid the fines and expulsion.
However, the appeal didn't reverse the cease-and-desist order, NASD said.
"The brokerage is also at the center of numerous state disciplinary actions," NASD said in a prepared statement. "In recent weeks, citing a variety of securities violations, regulators in Texas, Connecticut, New Hampshire and Maine have revoked L.H. Ross's licenses to do business in their states.
"Utah regulators recently issued an emergency order suspending L.H. Ross's license, while regulators in Colorado have scheduled an April 8 hearing on possible revocation of the firm's license."