Founded First Jersey Securities in 1974. Eventually employed 1,200 brokers in 70 offices. The SEC closed First Jersey down in 1987, and in 1994 Brennan was found guilty of stock fraud and fined $75 million. He was given 12 years in prison for fraud, money laundering and contempt of court — he still owes much of the $130 million due creditors and investors. Quote to judge: “I guess you could say I disrespected the system. My judgment, I guess, was clouded by the ridiculously fast pace of my life.”
Founded Blinder & Robinson (aka Blind'em and Rob'em) in 1970. It eventually grew to 66 offices in 37 states. The firm was liquidated in 1990. Flamboyant, gold-chain and diamond pinky-ring wearing Blinder made $9 million a year and had a swimming pool outside his penthouse office in Manhattan. He was worth $100 million-plus when he was sentenced to 46 months in prison for racketeering, money laundering and stock fraud in 1992. He left prison in 1995 a pauper, and died of a heart attack in 2004 at age 82.
Founded Rooney Pace in 1978; the firm was closed by the SEC in 1987 for fraud. Thereafter, he secretly became the owner/operator of Sterling Foster & Company, a Melville, N.Y., brokerage that ripped off 30,000 investors with worthless securities and fraudulent IPOs. Pace raked in $200 million before Sterling was closed in 1997. He pleaded guilty in 2000 to 13 counts of conspiracy, money laundering and securities fraud. In April 2002 he was ordered to pay nearly $135 million in restitution and sentenced to eight years and four months in prison.
Jordan Belfort & Daniel Porush
Founded Stratton Oakmont in 1987. Following a “pump and dump” script, 80 brokers and 120 cold callers sat side-by-side, touting “house” penny stocks to the public while selling deeply discounted shares to insiders. Steve Madden, of shoe company fame and a friend of Porush, was also involved and was sentenced in 2002 to three-and-a-half years in prison for it. Porush and Belfort got four years each after offering to rat out others. Both are still paying off restitution of roughly $200 million each.
Founder of Hanover Sterling. Catoggio pled guilty in 2000 to racketeering and conspiracy charges stemming from a stock-manipulation scheme that cheated investors out of $150 million. He's serving a 12-year sentence and paying off $80 million in restitution. One broker, Louis Pasciutto, recalls his strategy in Gary Weiss' book Born to Steal: When the Mafia Hit Wall Street: “I would never call anybody who lived in Jersey or New York. Never. My best states were Utah, Texas, Arizona, Virginia.”
Ran Meyers Pollock Robbins, a New York-based mob-infiltrated firm with 160 brokers that bilked more than 16,000 investors out of $176 million. It shut down in 1997.
John Doukas & Walter Durchalter
Executives of White Rock Partners & Company who also controlled State Street Capital Markets Corporation. From 1993 to 1996 they used “pump and dump” schemes to cheat investors out of $40 million. They also used New York and Russian mafia members as protection.
Kenton Wood, Alan Stahler & Kalman Renov
Executives of D.H. Blair, a Wall Street firm founded in 1904. Chairman Wood and vice presidents Stahler and Renov ran D.H. Blair as a criminal enterprise from 1989 to 1998, when the firm closed. All three men pled guilty in 2002 to multiple counts of fraud and price-fixing schemes and were ordered to pay restitution of $21 million each.
Aron Bronstein & Tomer Yuzary
Founders of Golden Lender (aka. J.P. Gibbons), a Manhattan brokerage firm that between January 1998 and November 1999 fraudulently raised $5.2 million from 160 investors. Both men pled guilty and were sentenced in 2001 to 46 months in prison and were ordered to pay $3.2 million in restitution.
Founded L.H. Ross in 1994, and was expelled from NASD membership in 2004. Michelin was nailed by an FBI agent posing as a hedge fund manager for agreeing to sell $1 million of unregistered L.H. Ross stock in exchange for a 30 percent kickback. Convicted of stock fraud, fined $1 million and ordered to pay $11 million in restitution, he was sentenced to 27 months in prison in 2005. NASD has said the investigation and “process of determining what assets L.H. Ross has is ongoing.”
A producing manager with SG Cowen Securities and Lehman Brothers in New York, he stole more than $115 million from clients from 1987 to 2002. Gruttadauria pled guilty to securities and mail fraud and was sentenced in 2002 to seven years in prison. Cowen and Lehman settled with the NYSE and the SEC in 2003, paying a total of $7.5 million in fines, plus restitution.
Rhode Island-based Raymond James Financial Services rep who defrauded investors out of $52 million, which resulted in a controversial $11 million fine for Raymond James and increased scrutiny of independent brokerage offices. He pled guilty to fraud and was sentenced in February 2005 to 15 years in prison.