Craig has been an investment banker employed in the Equity Capital Markets area at J.P. Morgan since 2001. At the time of the events at issue, the customer, a "sophisticated investor" as that term is used and defined under federal securities law, was the majority shareholder, CEO, chair and president of a NYSE listed company providing technology-based insurance and employer solutions. In the fall of 2015, the customer engaged J.P. Morgan to act as his agent in connection with a private equity placement of Patriot commonly known as a PIPES, or Private Investment in Public Equity, transaction. 

The transaction was successfully closed in December 2015 with two hedge fund purchasers, and the customer personally received a sizeable portion of Patriot stock sold in the PIPE transaction. Upon the public announcement of the purchase and sale, the customer complimented Craig for "a job well done." Almost a year and a half following the closing, after the customer failed to pay to J.P. Morgan the placement fee due under the placement agreement, the latter filed suit against J.P. Morgan and commenced litigation against Craig and J.P. Morgan in a Florida state court (subsequently removed to the U.S. Southern District of Florida) in which he alleged, inter alia, certain misrepresentations made by Craig and J.P. Morgan, i.e., that the placement would be shown to then current Patriot institutional investors (the so-called "bait and switch" claim); that the placement was to be a longterm investment; and that there would be no downside market risk to the price of Patriot stock if the transaction were consummated. 

Each of these allegations is clearly erroneous, false or both. 

First, the placement agreement had no such limitation on who could invest, and neither Craig nor the representative of J.P. Morgan made any such representation. The ultimate purchases were identified very early in the transaction, and the customer or his counsel could have objected at that time. 

Second, Craig made no representation that the PIPE investors were to be "long term." The only stipulation in the heavily negotiated PIPE purchase agreement was that the hedge funds were to maintain a net long position in the stock. 

Finally, neither Craig nor J.P. Morgan ever represented to the customer (who was being independently advised and represented by very experienced and sophisticated counsel) that the PIPE transaction posed no significant downside risk to the stock price. In any event, Craig further testified that, in his experience, such was not normally the case, nor did he have any reason to believe that the Patriot transaction would be any different. 

When it became apparent that the customer was judgment proof, J.P. Morgan discontinued its New York litigation, and subsequently the customer withdrew the Florida litigation with prejudice. Both actions were terminated without payment of any kind by Craig or J.P. Morgan, and there were no conditions imposed on the customer to consent to expungement. Craig testified that he has made no prior application to expunge this occurrence, which is the only mark on his CRD. He further testified as to the adverse impact this disclosure has on his business. 

The interests of the investing public being in no way negatively implicated, and by reason of the foregoing, the Panel finds that the claims or allegations made by the customers are clearly erroneous, false or both, and warrant expungement pursuant to Rule 2080.

Nearly half a million Alabama cell phone numbers received identical text messages in 2015 telling them to click a link to "verify" their bank account information. The link took recipients to a realistic-looking bank website where they typed in their personal financial information.

But the link was not the actual bank's website-it was part of a phishing scam. Just like phishing messages sent over email, the text message-based scam was easy to fall for. The web address was only one character off from the bank's actual web address.