New York-based brokerage firm Revere Securities LLC has agreed to pay $800,000 to settle allegations brought by regulators that it failed to identify suspected "pump-and-dump" trading tied to sharp stock price swings following the initial public offerings (IPOs) of dozens of small companies, most of them headquartered in Asia.
The Financial Industry Regulatory Authority (FINRA) alleged on Tuesday that Revere failed to conduct adequate due diligence on clients and did not implement proper anti-money laundering safeguards while helping these companies enter the U.S. capital markets.
The enforcement action is part of a broader U.S. regulatory crackdown on "pump-and-dump" schemes. Such schemes typically involve manipulators buying cheap, thinly traded shares of small companies, then luring investors to buy through online forums or chat rooms to drive up the price, before dumping their holdings and causing the stock to plummet.
Revere was not accused of manipulating stock prices. The firm neither admitted nor denied FINRA's allegations and agreed to hire a third-party consultant to review its internal policies.
In a separate statement, Revere attorney Michael Ference said the firm had already engaged a consultant before reaching the settlement with FINRA and had "not ignored any red flags." He said Revere's clients did not suffer losses as a result of the allegations, and the firm "continues to strengthen and improve its compliance and supervisory systems."
FINRA said that since 2022, Revere's core business has included serving as an underwriter or member of underwriting syndicates for small-company IPOs.
FINRA said the unusual activity included multiple groups of seemingly unrelated clients opening new accounts on the same day, sharing the same residential address, and executing identical or highly similar trades in the same companies.
A media analysis in January showed that roughly one-quarter of the smallest companies listed on the Nasdaq between 2023 and 2025 were affected by WhatsApp promotions and subsequent stock price crashes, with most of them headquartered in Asia.
Over the past year, the U.S. Securities and Exchange Commission (SEC) took the rare step of suspending trading in 14 companies that experienced sharp stock price volatility. According to securities filings, Revere participated in the IPOs of three of those companies.