The Securities and Exchange Commission today charged Michael A. Glickstein and his New York-based investment advisory firm with fraud based on a misleading press release announcing their offer to purchase a majority stake in retail bookseller Barnes & Noble.

According to the SEC’s order instituting a settled administrative proceeding, Glickstein and G Asset Management LLC issued a press release on Feb. 21, 2014 announcing that G Asset had offered to purchase a majority interest in Barnes & Noble for $22 per share.  In a matter of seconds after the announcement, Barnes & Noble’s stock price rose from $17.05 per share to $18.99 per share, causing the New York Stock Exchange to temporarily halt trading in the stock.

The SEC’s order found that G Asset’s press release was misleading because it did not disclose material facts, including:

• G Asset had no ability to finance its purported offer to purchase Barnes & Noble and no reasonable basis to believe it could finance its offer in the future.
• G Asset had recently purchased thousands of Barnes & Noble shares and short-term call options, intending to profit by selling the shares and options after issuing the press release.

The SEC’s order further found that G Asset’s investment funds made approximately $168,000 in profits as a result of their sale of Barnes & Noble stock and options.

G Asset and Glickstein, G Asset’s owner, president, and chief investment officer, agreed to settle charges that they violated the antifraud provisions of the securities laws and a related SEC antifraud rule.  Without admitting or denying the findings in the order, Glickstein and his firm consented to a settlement that requires them to return $175,000 of allegedly ill-gotten gains and interest.  G Asset also agreed to be censured and Glickstein agreed to pay a civil penalty of $100,000 and be barred from the securities industry for a minimum of five years.

The SEC’s investigation was conducted by Enforcement Division’s Market Abuse Unit staff Mark Germann, Daniel Marcus, and Charles Riely with assistance from Matthew Lambert in the New York Regional Office.  The case was supervised by the unit’s co-chief Joseph Sansone.

The SEC appreciates the assistance of the New York Attorney General’s office.