Stoltmann Law Offices is investigating Halcyon Cabot Partners, and its principals, Michael Trent Morris and Ronald Mark Heineman. They are accused of engaging in a scheme to defraud investors by causing Halcyon to serve as a bogus placement agent to conceal a kickback of a private placement fee, for the firm to serve as a false sales agent so an expelled broker could charge commissions to buyers and sellers in private sales of securities, to falsify records of securities trades for the now-expelled broker, and of engaging in unauthorized and excessive trading in customer accounts. Excessive trading is also referred to as “churning” and is a practice that largely generates commissions for the broker, and is against securities laws and regulations.
In May 2012, Morris Heineman and now-barred representative, Craig L. Josephberg, set up a scheme so that their member firm, Halcyon, would help conceal the discount provided to a venture capital firm, Socius Capital Group, LLC., when it purchased a private placement in Cell Therapeutics, Inc., a cancer drug development company. The firm would earn a 5% fee in the offering (almost $1 million), but the firm also entered into a separate, undisclosed agreement with an affiliate of Socius, through which Halcyon gave back nearly almost all of the 5% fee back to Socius. The representatives also improperly facilitated efforts by Felix Investments, to collect commissions for themselves from both buyers and sellers, in private securities transactions. Halcyon allowed a Felix broker to dually register with both firms so that Felix could charge buyer commissions and Halcyon could charge seller commissions.
Between June 2011 and March 2013, Halcyon, through Josephberg, engaged in churning and excessive trading in the accounts of two firm customers. During this period, Halcyon and Morris, failed to establish and implement an adequate and reasonable system designed to cause the detection and reporting of suspicious activity. At the time, Morris was designated to serve as the Compliance Officer for Halycon, even though he did not have the requisite knowledge or training to serve as such.
According to Michael Trent Morris’ BrokerCheck record, he is still registered with Halcyon Partners in New York, New York, and has three prior customer disputes against him. Heineman is also currently registered with Halcyon Partners in New York. If you invested money with Halcyon Partners, you may be able to recover your investment losses in the FINRA arbitration forum by calling our law firm at 312-332-4200. Halcyon Partners may be liable for customer investment losses because they failed to reasonably supervise their brokers, and engaged in securities activities that were against rules and regulations. The call is free with no obligation. We take cases on a contingency fee basis.