Securities Arbitration Lawyers BlogFINRA Bars David Gabai for Market Manipulation
David Lawrence Gabai, of West Hills, California, submitted a FINRA AWC in which he was barred from association with any FINRA member in any capacity. Gabai was registered with LPL Financial Corporation until 2010. Mr. Gabai then briefly worked for Comerica Securities. Gabai consented to the sanction and to the entry of findings that he held significant quantities of shares in a security in his personal brokerage accounts, and used deceptive, fraudulent, and manipulative devices and schemes involving the trading of the security. The findings stated that through the use of his personal and other brokerage accounts, Gabai engaged in pre-arranged trading and wash sales, in an attempt to create a false or misleading appearance of active trading relating to the market for the security and pump up the price of the security. Among other things, Gabai’s misconduct enabled him to avoid margin calls in his personal brokerage accounts avoiding sales of the stock. Gabai effected trades that set the closing and opening price of the security. In some of these instances, Gabai and another registered representative effected matched trades between the brokerage accounts of Gabai’s customers and the brokerage accounts of the other registered representative’s customers to give the appearance of a more active market. The matched orders were typically effected at prices that were equal to or higher than the prior trade price for the shares pushing the price higher.
The findings also included that Gabai effected pairs of wash trades in the security that took place within his personal brokerage accounts or between his personal brokerage accounts. The wash trades did not involve any change in beneficial ownership and Gabai effected them to create a false or misleading appearance of active trading relating to the market for the security and to manipulate the security’s price. As a result of his conduct, Gabai willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Gabai also caused the publication or circulation of reports of non-bona fide purchases or sales of the security. (FINRA Case #2009017402501)
If you invested money with David Lawrence Gabai, you may be entitled to recover some of you investment losses. Please call our securities law firm toll free at (800) 975-4345 to speak to an attorney to find out how we may be able to help you recover some of your investment losses.