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Mark J. Gillis. Photo: Courtesy <em>Adirondack Daily Enterprise</em>
Mark J. Gillis. Photo: Courtesy Adirondack Daily Enterprise

Local broker barred for fraud

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An investment banker and securities broker from Saranac Lake has been barred from the securities industry for defrauding his customers out of hundreds of thousands of dollars.

Mark J. Gillis and the financial management firm he co-owns, Hudson Valley Capital Management, have been expelled for using customer funds to cover losses caused by his improper day trading.

That's according to an investigation by the Financial Industry Regulatory Authority, the independent corporation that regulates the securities industry in the U.S.

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Reported by

Chris Knight
Adirondack Correspondent

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Mark Gillis moved to Saranac Lake from Westchester County in July 2011 and opened up an office for his brokerage business on Academy Street. He quickly got involved in the community, volunteering as a youth sports coach and then running unsuccessfully for one of two available seats on the village board this March.

FINRA said its investigation found that Gillis improperly day-traded millions of dollars of stock in July of this year. Gillis then manipulated the share prices of the stocks and withdrew the proceeds through accounts he controlled.

When the trading led to significant losses for his firm, the authority said he covered those losses by making unauthorized trades involving customer accounts. One customer ended up losing about $400,000.

After the fraud was uncovered, Gillis admitted that he intentionally marked up share prices to cover losses from his improper day trading, and that he intentionally manipulated stock prices in order to transfer money to his personal brokerage account.

Permanently barring Gillis and his company from the securities industry is among the most severe sanctions FINRA can issue. It was unclear whether the case could lead to any criminal prosecution, as an authority spokesperson declined to answer additional questions about the case Friday.

Gillis said Friday he couldn't speak publicly about the matter because he’s prohibited from doing so by the settlement agreement; however, he said he's trying to pay back one of the customers affected. He also stressed that he didn’t have any local accounts.

In recent months, Gillis has been working to open a microbrewery in a former carwash in Saranac Lake. He said Friday that he had just received his state Liquor Authority license and planned to open the business this week.

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