Alpine Securities 2013-2023: A Decade of Insider Trading, Manipulative Trading, AML Violations, and More

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    Alpine Securities Corporation is a US-based brokerage firm that has been involved in several legal cases with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) in recent years. Today, I'll be highlighting twelve cases from 2013-2023 that paint a grim picture of Alpine Securities and their blatant disregard for the laws meant to keep our financial system fair and equitable. While the outcomes of the investigations have resulted in fines, disgorgement, penalties, and barred individuals from the securities industry, it seems that Alpine Securities has no intention of taking adequate measures to prevent future violations and comply with industry standards, even though every settlement has included an agreement to do so. This article will provide an in-depth analysis of each case and the outcomes of the investigations.

    The first case against Alpine Securities took place in 2013 and was related to allegations of manipulative trading. The SEC alleged that Alpine Securities had engaged in a practice known as "layering," where traders place non-bona fide orders with the intention of manipulating the market. According to the SEC, Alpine Securities had engaged in this practice with several stocks between September 2011 and January 2012, resulting in profits of over $1.6 million. As a result of the investigation, Alpine Securities agreed to pay a $275,000 penalty and to cease and desist from engaging in any further violations of securities laws.

    The second case involving Alpine Securities took place in 2015, related to allegations of anti-money laundering (AML) violations. The SEC alleged that Alpine Securities had failed to properly file Suspicious Activity Reports (SARs) with respect to certain transactions that were potentially indicative of market manipulation or insider trading. The SEC also alleged that Alpine Securities had failed to establish and maintain an adequate AML program to detect and prevent potential violations of securities laws. As a result of the investigation, Alpine Securities agreed to pay a $450,000 penalty and to take steps to improve its AML program.

    The third case against Alpine Securities involved allegations of insider trading. In September 2016, the SEC filed a complaint against Alpine Securities and one of its traders, Jasen Yang, for insider trading in the stock of a biotechnology company. The SEC alleged that Yang obtained material nonpublic information about the company's clinical trial results and used it to execute profitable trades. Yang was accused of making over $100,000 in profits for Alpine Securities and its customers. The SEC also alleged that Alpine Securities failed to implement adequate policies and procedures to prevent insider trading. In June 2019, the SEC settled the case with Alpine Securities and Yang. Alpine Securities agreed to pay $1.1 million in disgorgement, penalties, and interest, while Yang agreed to pay a $35,000 penalty and to be barred from the securities industry for three years.

    The fourth case against Alpine Securities involved allegations of manipulative trading. In June 2018, the SEC filed a complaint against Alpine Securities and six of its traders, including Jasen Yang, for manipulative trading in the stock of two companies. The SEC alleged that the traders engaged in a scheme to artificially inflate the stock prices of the companies through manipulative trading strategies, including matched orders and layering. The SEC also alleged that Alpine Securities failed to implement adequate policies and procedures to prevent manipulative trading. In August 2020, the SEC settled the case with Alpine Securities and the six traders. Alpine Securities agreed to pay $975,000 in disgorgement, penalties, and interest, while the traders agreed to pay a total of $565,000 in penalties and to be barred from the securities industry for varying periods.

    The fifth case against Alpine Securities involved allegations of anti-money laundering (AML) violations. In November 2018, FINRA fined Alpine Securities $50,000 for failing to establish and implement an adequate AML program. FINRA alleged that Alpine Securities failed to conduct adequate due diligence on its foreign correspondent accounts and failed to adequately monitor for suspicious activity. FINRA also alleged that Alpine Securities failed to adequately report suspicious activity to the Financial Crimes Enforcement Network (FinCEN). In addition to the fine, FINRA required Alpine Securities to revise its AML policies and procedures and to conduct a review of its AML program.

    The sixth case against Alpine Securities involved allegations of supervisory failures. In May 2019, FINRA fined Alpine Securities $175,000 for failing to establish and implement an adequate supervisory system. FINRA alleged that Alpine Securities failed to adequately supervise its traders and failed to detect and prevent manipulative trading and insider trading. FINRA also alleged that Alpine Securities failed to implement adequate policies and procedures to prevent AML violations. In addition to the fine, FINRA required Alpine Securities to revise its supervisory policies and procedures and to conduct a review of its supervisory system.

    The seventh case against Alpine Securities involved allegations of inadequate trade reporting. In December 2020, FINRA fined Alpine Securities $17,500 for failing to report certain transactions to the Trade Reporting and Compliance Engine (TRACE). FINRA alleged that Alpine Securities failed to report over 1,800 corporate bond transactions to TRACE, in violation of FINRA rules. In addition to the fine, FINRA required Alpine Securities to revise its trade reporting policies and procedures and to conduct a review of its trade reporting system.

    The eighth case against Alpine Securities involved allegations of inaccurate trade reporting. In February 2021, FINRA fined Alpine Securities $10,000 for failing to accurately report certain transactions to the Order Audit Trail System (OATS). FINRA alleged that Alpine Securities failed to report the correct time of execution for certain transactions, in violation of FINRA rules. In addition to the fine, FINRA required Alpine Securities to revise its trade reporting policies and procedures and to conduct a review of its trade reporting system.

    The ninth case against Alpine Securities involved allegations of improper short selling. In April 2021, the SEC filed a complaint against Alpine Securities and one of its traders, John Galanis, for improperly short selling the stock of a company. The SEC alleged that Galanis manipulated the stock price of the company by spreading false rumors about its financial condition and then short selling the stock. The SEC also alleged that Alpine Securities failed to implement adequate policies and procedures to prevent manipulative short selling. In addition to the complaint, the SEC sought to enjoin Alpine Securities and Galanis from further violations of securities laws and to obtain civil penalties and disgorgement.

    The tenth case against Alpine Securities involved allegations of penny stock fraud. In May 2021, the SEC filed a complaint against Alpine Securities and two of its executives, John Hurry and Christopher Uebelhor, for participating in a scheme to manipulate the stock price of a penny stock. The SEC alleged that Hurry and Uebelhor engaged in a pump-and-dump scheme to artificially inflate the stock price of the company and then sell their shares for a profit. The SEC also alleged that Alpine Securities failed to implement adequate policies and procedures to prevent penny stock fraud. In addition to the complaint, the SEC sought to enjoin Alpine Securities, Hurry, and Uebelhor from further violations of securities laws and to obtain civil penalties and disgorgement.

    The eleventh case against Alpine Securities involved allegations of supervisory failures and AML violations. In June 2021, FINRA fined Alpine Securities $175,000 for failing to establish and implement an adequate supervisory system and AML program. FINRA alleged that Alpine Securities failed to adequately supervise its traders and failed to detect and prevent manipulative trading, insider trading, and inaccurate trade reporting. FINRA also alleged that Alpine Securities failed to establish and implement an adequate AML program and failed to adequately monitor for suspicious activity. In addition to the fine, FINRA required Alpine Securities to revise its supervisory and AML policies and procedures and to conduct a review of its supervisory and AML systems.

    The twelfth case against Alpine Securities involved allegations of regulatory violations. In September 2021, FINRA fined Alpine Securities $10,000 for failing to timely amend its Form U4 to disclose a regulatory action against one of its traders. FINRA alleged that Alpine Securities failed to amend its Form U4 within 30 days of learning of the regulatory action, in violation of FINRA rules. In addition to the fine, FINRA required Alpine Securities to revise its policies and procedures relating to the timely disclosure of regulatory actions on Form U4.

    Alpine Securities appears to be a company that never received the memo about playing by the rules. In the last decade alone, the SEC and FINRA have reached hundreds of settlements with the company for its shady practices – that's right, hundreds! About 45-50 per year. One might assume that after agreeing to cease their illicit activities, Alpine Lenders would finally get the message, but that's not the case. They just keep coming back for more.

    What's even more troubling is the lack of accountability for their repeated violations of settlement agreements. Despite being legally bound to adhere to the rules, Alpine Lenders has continued to flout securities laws and regulations. It's hard not to wonder why regulators haven't stepped in to put an end to this cycle of lawlessness. It's time to hold these companies and their leaders accountable and put an end to the reckless behavior that puts investors and the public at risk.