The allegations read: Section 5 of the securities act of 1933, finra rule 2010 - carlo corzine participated in the sale into the public markets of more than 152 million unregistered shares of a thinly-traded over-the-counter security on behalf of his customers, including the president and chief executive officer (ceo) of the issuer and other accounts he controlled. Corzine's customers opened accounts at his member firm through which they deposited and sold large amounts of the stock, then immediately wired the sale proceeds out of the accounts. These sales resulted in proceeds of approximately $570,000 to the customers. Corzine failed to perform adequate due diligence prior to the execution of these sales, notwithstanding his duty to so and the red flags indicating potential violations of the registration requirements of the securities act of 1933. Because the stock was unregistered, it could not be sold absent an applicable exemption from registration. No exemption was available under the circumstances. Corzine did not adequately investigate the veracity of representations contained in a letter from the company's president and ceo pertaining to the stock that accompanied many of the stock deposits, nor did he, in some instances, independently verify certain relevant and material information pertaining to the stock provided by the customer.
