NEWARK - J.P. Turner & Company, L.L.C. ("J.P. Turner") has been ordered to cease and desist from violations of the New Jersey Uniform Securities Law and has paid $195,000 in civil monetary penalties, under the terms of a consent order announced today by Attorney General Stuart Rabner, Consumer Affairs Acting Director Stephen B. Nolan and Bureau of Securities Chief Franklin L. Widmann.

The settlement resolves allegations that J.P. Turner failed to supervise employees at the Brooklyn, New York and Boca Raton, Florida branch offices and failed to establish and/or enforce procedures necessary to detect and prevent the dishonest and unethical conduct of those employees.

"It is critically important that broker-dealers conducting business in New Jersey establish and enforce controls to prevent sales practice abuses, such as those alleged here," said Attorney General Rabner. "Our message to the industry is 'get your house in order' or, as in this case, the state will act to safeguard consumers and enforce our laws."

The bureau's investigation uncovered evidence that from January 2001 to December 2003, agents in the Brooklyn, New York and Boca Raton, Florida branch offices of J.P. Turner engaged in violations of federal and state securities laws that went undetected by the firm.

This included evidence that the agents:

• opened accounts without client consent;

• conducted unauthorized transactions in client accounts;

• overtraded in client accounts;

• engaged in trading that was unsuitable for certain client account profiles;

• and misrepresented and/or failed to disclose various risks to clients in connection with the buying and/or selling of securities.

Additionally, despite the existence of a compliance manual that expressly prohibited J.P. Turner agents from engaging in high pressure sales tactics, a number of unapproved sales scripts were discovered that contained suggestions of guarantees of success, false claims of analyst recommendations and other suggestions for misleading clients. These sales scripts were found throughout the offices, including the desks of agents.

"We expect that J.P. Turner will make substantive changes to its oversight and management processes to ensure appropriate employee supervision," said Acting Director Nolan. "The types of sales practices uncovered here by the bureau are particularly harmful to the investing public. It is unacceptable that the company did not stop its employees from engaging in these practices."

The bureau also concluded through its investigation that J. Michaels & Company, Inc., a Florida corporation ("J. Michaels"), acted as a broker-dealer through its role in the activities of the Brooklyn, New York and Boca Raton, Florida branch offices. The branch offices were owned and operated by Giasamis "James" Sideris ("Sideris"), President of J. Michaels. J. Michaels was not registered as a broker-dealer in New Jersey. The New Jersey Uniform Securities Law prohibits broker-dealers from conducting business in New Jersey unless they are registered with the bureau of securities.

"The frontline of investor protection against unscrupulous brokers-dealers is the registration process," said Bureau Chief Widmann. "The bureau's determination that J. Michaels acted as an unregistered broker-dealer will serve as notice to firms that use the independent broker-dealer model that entities whose sole source of revenue is derived from and are materially involved in the securities business must register with the bureau or face appropriate enforcement actions."

Under the terms of this consent order the Brooklyn, New York and Deerfield Beach, Florida (formerly Boca Raton, Florida) branch offices are prohibited from soliciting any new accounts from New Jersey residents for a period of no less than two years.

In addition, J.P. Turner must retain an independent consultant who will review and suggest changes to the company's business practices, procedures for branch office supervision, suitability standards and monitoring of agent sales activities. The company must also maintain a compliance principal in the New York Office, with regularly scheduled on-site visits to the Florida Office, for a period of no less than two years. J.P. Turner will also continue to cooperate with the bureau in any ongoing investigation of the two branch offices and of any present or former J.P. Turner employees.

J.P. Turner entered into the consent order without admitting or denying the bureau's findings. J.P. Turner, with headquarters in Atlanta, Georgia, has been registered as a broker-dealer with the bureau since July 1997. It has 122 active branch offices nationwide, including 13 in New Jersey.

The investigation was conducted for New Jersey by Chief of Enforcement Richard Barry, Supervising Investigator Michael McElgunn and Investigating Attorney Peter C. Cole of the bureau of securities.

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