NASD Regulation Inc. has censured and fined day trading pioneers All-Tech Direct Inc., of Montvale, N.J.

NASDR fined the firm US$250,000. It also fined and suspended company founder and CEO Harvey Houtkin, president Mark Shefts, and vice president of operations Harry Lefkowitz, for violating NASD rules.

The Securities and Exchange Commission also announced settlements with All-Tech, Shefts and Lefkowitz at the same time.

In settling this case, All-Tech, Houtkin, Shefts and Lefkowitz neither admitted nor denied NASDR’s findings.

NASDR found that All-Tech, Shefts and Lefkowitz failed to supervise the activities of employees who routinely arranged loans between customers. It found that All-Tech employees misrepresented the risks associated with the loans by telling customers the loans were basically guaranteed with virtually no risk. In a number of instances, the interest to be paid by the borrowing customer to the lending customer was set at an excessive rate.

NASDR also found that All-Tech and Houtkin made statements which were misleading, unwarranted or without a sound basis in a number of print and radio advertisements, on the firm’s Web site, during television appearances and in a book that was given out by the firm as sales literature.

It also found that All-Tech, Houtkin and Shefts violated NASD rules by permitting a disqualified person to participate actively in the firm’s securities-related activities. They also violated NASD rules by failing to properly register an individual who assisted in the management of two All-Tech branch offices.

In addition to the US$250,000 fine, All-Tech was also ordered to retain an outside consultant to review and make recommendations concerning the firm’s policies and procedures as they relate to the matters covered by the settlement.

Houtkin was fined US$50,000, suspended from associating with any NASD member in all capacities for 15 days and suspended as a principal and supervisor for 105 days.

Shefts was fined US$50,000, suspended from associating with any NASD member in all capacities for 30 days and suspended as a principal and supervisor for 90 days.

Lefkowitz was fined US$20,000, suspended from associating with any NASD member in all capacities for 60 days and suspended as a principal and supervisor for 60 days.

The settlements with the SEC include a US$225,000 civil penalty against All-Tech and assorted suspensions and civil penalties against the individuals.

It was a disgruntled former All-Tech day trader that went on a murderous rampage in July 1999, killing 12 people including himself and nine other day traders and employees at two All-Tech offices in Atlanta.