Craig Stanton Norton (CRD #349405, Highlands Ranch, Colorado)

March 21, 2022 – An OHO decision became final in which Norton was barred from association with any FINRA member in all capacities and ordered to pay disgorgement in the amount of $240,360, plus prejudgment interest. The sanctions were based on the findings that Norton willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and FINRA Rules 2022 2020 and 2010 by manipulating the price of an over-the-counter (OTC) microcap security issued by a company. The findings stated that Norton bought 250 shares of the company for his member firm’s proprietary account at $5 per share, setting in motion the manipulation. Norton’s purchase set an artificially high closing price for the company’s stock on the day of that trade. This price helped release millions of the company’s shares held by Norton’s customers from resale restrictions imposed by an agreement they had with the issuer. Over the next few months, during a stock promotion paid for by one of his customers, Norton used his role as a company market maker to coordinate trading in the stock between and amongst his customers. Norton’s trading helped create the false appearance of active trading at steadily increasing prices. By engaging in this conduct, Norton enabled his customers to liquidate their company stock at artificially inflated prices. As a result of the manipulative trading, firm customers sold around $13.2 million shares of the company, generating about $8.5 million in net trading proceeds. From the trading, Norton and the firm generated $400,600 in trading compensation and Norton received around 60 percent of the revenue he generated from the trading. The findings also stated that despite being aware of many red flags, Norton failed to raise concerns about his customers engaging in a manipulative trading scheme to his firm. Norton knew that his customers had all acquired their shares on the same terms, price, and under nearly identical stock purchase agreements. Norton also knew that the shares were deposited at the firm at or about the same time. Nonetheless, Norton failed to raise these concerns with anyone at the firm, nor did he ask any of his customers about these similarities. Instead, Norton chose to rely merely on his customers’ representations on stock deposit forms that they were not acting in concert. (FINRA Case #2016048837401)