The Utah Securities Division has petitioned to revoke or suspend the license of a Salt Lake stock brokerage and its principal for allegedly dishonest or unethical practices.
Johnson Bowles Co. Inc. and Marlen Vernon Johnson have 20 calendar days to respond to the notice of the state's administrative action and to request a hearing.The state's petition alleges that Johnson Bowles, through Marlen Johnson, attempted to buy stock of a company called USA Medical after a federal court judge ruled that the stock had been unlawfully issued and the state had effectively suspended trading in March.
The federal court's action had resulted from a suit filed by Marlen Johnson and his company seeking to prevent trading in USA Medical stock. The judge had ruled that the stock had been traded as part of a fraudulent scheme designed to artificially inflate the stock's price. But the federal judge had refused Johnson Bowles' request for a federal injunction, saying the brokerage either had known or should have known what was going on.
However, the state then immediately stepped in and effectively suspended trading,a fact of which Marlen Johnson and his brokerage firm were fully aware.
Nevertheless, the state alleges, Marlen Johnson, acting on behalf of Johnson Bowles, attempted to purchase stock of USA Medical between April 3 and April 18.