By Dow Jones Business News, September 30, 2013, 02:32:00 PM EDT
By Matthias Rieker
The brokerage industry's self-regulator charged New York investment John Carris Investments LLC with defrauding and
misleading its investors.
Carris, which is owned by Invictus Capital Inc, sold stock in Fibrocell Science Inc. ( FCSC ) while at the same time
selling its own shares in the biotechnology company, the Financial Industry Regulatory Authority said Monday. In
addition, Finra alleges Carris mislead investors about the financial health of Invictus.
Penalties could include a fine, an order to pay restitution, censure, suspension, or even bar from the securities
Finra also said that Carris Chief Executive George Carris failed to properly disclose the firm's payments covering his
The regulator claimed that $385,076 classified as office expenses included $10,622 for Mr. Carris' condominium
association expenses; $54,629 classified as business gifts ranged from $10,554 for purchases at a tattoo parlor and $
6,790 for firearms related expenses to $4,853 for supermarket purchases and $5,987 for pet care; and $37,134 classified
as travel expenses included $16,719 for motor vehicle and motorcycle expenses.
The firm failed to pay hundreds of thousands of dollars in employee payroll taxes, Finra claims.
Carris has underwritten several Fibrocell securities offerings between 2009 and 2012, according to information on its
web site, the most recent one was a common stock offering in October 2012 as a co-placement agent with Barclays PLC
( BCS ) and MTS Securities LLC as lead agents.
Finra alleges the firm--and its head trader Jason Barter--manipulated the stock while acting as placement agent
between May and September 2010.
Between October 2010 and 2012 Carris misled investors when it solicited new investments to pay dividends to early
investors without disclosing the frail financial condition of Invictus. As of March 2013, Invictus Capital had defaulted
on $2 million of Invictus notes sold to earlier John Carris Investments customers, Finra said.
Officials with John Carris Investments and Fibrocell couldn't be reached immediately for comment.
Write to Matthias Rieker at email@example.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
Copyright (c) 2013 Dow Jones & Company, Inc.