Business

SEC Fines, Bars Advisor That Made False Offer For Barnes & Noble

Back in February of last year, almost everyone on Wall Street was scratching their head trying to figure out why anyone would pay $22 a share for old school bookstore Barnes & Noble when a press release claiming a formal offer had been made hit the wires that morning. It turned out the answer was nobody would, and the press release was a fraud perpetrated by G Asset Management and Michael Glickstein.

Details on SEC charges against Barnes & Noble scammer

On Thursday, the SEC announced it had charged Michael A. Glickstein and his investment advisory firm with fraud for publishing a misleading press release announcing an offer to buy a majority stake in bookseller Barnes & Noble. Glickstein and his firm, G Asset Management LLC, put out a press release on Feb. 21st of last year, claiming that G Asset had offered to purchase a majority interest in Barnes & Noble for $22 per share.

The price of Barnes & Noble’s shares almost instantly increased from $17.05 per share to $18.99 per share, causing a temporary trading halt on the NYSE.

Barnes & Noble

The SEC legal staff determined that G Asset’s press release was misleading because it did not disclose material facts such as G Asset had no ability to finance its offer to purchase Barnes & Noble and no reasonable basis to think it would be able to do so in the future. G Asset had also recently purchased thousands of Barnes & Noble shares and short-term call options hoping to sell then and profit on the fraud. The SEC determined that G Asset’s investment funds made close to  $168,000 in profits related to their sale of Barnes & Noble stock and options they purchased shortly before putting out the false press release.

G Asset and Glickstein, G Asset’s owner and CIO, settled charges they violated the anti-fraud provisions of the securities laws and SEC regulations. Without admitting or denying the findings in the order, Glickstein and his firm agreed to a settlement requiring the return of $175,000 of fraudulent profits. The firm also agreed to an official censure and Glickstein will pay a civil penalty of $100,000 and is barred from employment in the securities industry for at least five years.