Co-CEO Also Charged With Forgery to Facilit…

Co-CEO Also Charged With Forgery to Facilitate Manipulation;
Firm, Other Officers Charged With Best Execution Violations

WASHINGTON, Nov. 29 – LAWFUEL – The Law News Network — NASD today announced charges against Kirlin Securities of Syosset, NY, (a wholly owned subsidiary of Kirlin Holding Corporation) and two Kirlin officials — Anthony Kirincic, the firms’ co-CEO and Kirlin Holding’s largest shareholder, and Andrew Israel, Kirlin’s head
trader — for their roles in a fraudulent scheme to artificially inflate the
price of Kirlin Holding stock.

The purpose of the scheme was to increase the stock price to $1.00 a share
or higher for 10 consecutive trading days, thereby avoiding a threatened
delisting of the stock from the Nasdaq National Market. NASD also charged
that Kirincic forged his parents’ signatures on stock certificates and other
documents to generate funds to carry out the manipulation scheme.
Additionally, NASD charged Kirlin Securities, Israel and David Lindner, then
the co-CEO of Kirlin Holding and Kirlin Securities, with failing to obtain
best execution on a customer order of Kirlin Holding stock during the same

According to NASD’s Complaint, the Nasdaq National Market notified Kirlin
Holding in February 2002 that the stock price of Kirlin Holding had dipped
below $1.00 a share for 30 days and that Kirlin Holding would be delisted
unless, within 90 days, its stock price increased to, and remained above,
$1.00 per share for 10 consecutive trading days. Kirincic was the account
executive for accounts held by his parents and his sister at Kirlin
Securities. Soon after Nasdaq issued its delisting warning, Kirincic forged
his parents’ signatures on Kirlin Holding stock certificates and caused Kirlin
Holding to repurchase those shares from his parents’ account. He also forged
his parents’ signatures on letters of authorization to transfer funds
generated from these repurchases to his sister’s account.

NASD’s Complaint charges that beginning on March 18, 2002, Kirincic and
Israel began manipulating the stock price of Kirlin Holding by entering large
and frequent purchase orders through Kirincic’s sister’s account at prices in
excess of the inside bid. After placing orders, Kirincic often cancelled
those that had been only partially filled and replaced them with other orders
at higher prices in an effort to bid up the price of the security. The size of
these transactions often dwarfed the historic average daily volume for Kirlin
Holding. In addition, Kirincic’s trading through his sister’s account
constituted a significant majority of the trading volume and number of
transactions in the stock, thereby dominating the market for Kirlin Holding
stock throughout the manipulation.

Kirlin, Kirincic, and Israel successfully created an illusion that the
demand for Kirlin Holding’s common stock was increasing based on genuine
customer demand. Their scheme succeeded in raising the price of Kirlin
Holding’s common stock from $.64 per share on March 18, 2002, to more than
$1.00 per share on April 2, 2002, despite an absence of any news or other
apparent reason for the company’s stock price to increase.

After April 2, 2002, Kirlin, Kirincic and Israel successfully maintained
Kirlin Holding’s stock price at or over $1.00 per share for at least 10
trading days, using the same manipulative methods. On April 18, 2002 Nasdaq
informed Kirlin Holding that it had satisfied the market’s listing
requirements by having its stock price exceed $1.00 for 10 consecutive trading
days and therefore the stock would not be delisted.

NASD’s Complaint charges Kirlin Securities, Kirincic, and Israel with
fraud under the federal securities laws and NASD rules.

NASD’s Complaint also charges that on April 22, 2002, while Kirlin
Holding’s stock was still trading at more than $1.00 per share, Kirlin
Securities, through Lindner and Israel, executed a sale of a customer’s shares
in Kirlin Holding at $.80 per share in a transaction with Kirlin Holding. At
the time of this trade, the inside bid for the stock was $1.04 per share, and
two of Kirincic’s own relatives had sold their Kirlin Holding’s stock for
$1.05 per share. This violates the obligation under NASD rules for the firm,
Lindner, and Israel to achieve best execution for their customer’s order.

In January of this year, Kirlin Holding voluntarily ceased having its
stock listed on Nasdaq Stock Market and ceased filing periodic reports under
the federal securities laws. Its stock is currently quoted in the Pink Sheets
(Other OTC: KILN.PK).

Under NASD rules, a firm or individual named in a complaint can file a
response and request a hearing before an NASD disciplinary panel. Possible
remedies include a fine, censure, suspension or bar from the securities
industry, disgorgement of gains associated with the violations, and payment of

Investors can obtain more information about, and the disciplinary record
of, any NASD-registered broker or brokerage firm by using NASD’s BrokerCheck.
NASD makes BrokerCheck available at no charge to the public. In 2004, members
of the public used this service to conduct more than 3.8 million searches for
existing brokers or firms and requested more than 190,000 reports in cases
where disclosable information existed on a broker or firm. Investors can link
directly to BrokerCheck at Investors can also
access this service by calling 1-800-289-9999.

NASD is the leading private-sector provider of financial regulatory
services, dedicated to investor protection and market integrity through
effective and efficient regulation and complementary compliance and
technology-based services. NASD touches virtually every aspect of the
securities business — from registering and educating all industry
participants, to examining securities firms, enforcing both NASD rules and the
federal securities laws, and administering the largest dispute resolution
forum for investors and registered firms. For more information, please visit
our Web Site at

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