Owner of Blue Line Brewery in Potsdam indicted on federal charges for alleged securities fraud committed in 2012
Thursday, September 7, 2017 - 2:28 pm

By JIMMY LAWTON

POTSDAM -- Mark Gillis, owner of the Blue Line Brewery which operates locations in Potsdam and Saranac Lake, has been indicted on federal charges for wire and securities fraud dating back to July 2012, according to federal court documents.

In 2012, the Financial Industry Regulatory Authority expelled NY-based Hudson Valley Capital Management and barred then Chief Executive Officer, Mark Gillis, from the securities industry for defrauding its clearing firm and customers by using their funds and securities to cover losses caused by Gillis' alleged manipulative day trading, a news release from the authority says.

FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States.

Federal court documents show that Gillis has now been indicted on federal charges from those crimes. He faces three counts of wire fraud for allocations he made on July 27 and July 30 of 2012 and one count of securities fraud that occurred July 27, 2012.

The indictment seeks to make Gillis forfeit to the United States any property, real or personal, which constitutes or is derived from proceeds traceable to the alleged violations. This includes a monetary judgment of $558,650.

According to a news release issued by FINRA in 2012, it was found that Hudson Valley, acting through Gillis, used the firm's Average Price Account to improperly day trade millions of dollars of stock.

Gillis is then said to have manipulated the share prices of these stocks and withdrew the proceeds of his day trading through accounts he controlled. When Gillis' fraudulent trading caused significant losses in the firm's account, he covered those losses by making unauthorized trades involving customer accounts. Gillis purchased thousands of shares of securities in the open market in the firm's account and allocated these shares to customers at markups between 177 percent and 280 percent, the release says.

The most recent court documents available, dated Aug. 8, show that Gillis was released on the condition he appears to all proceedings as required and surrender for service any sentence imposed by the court.

Gillis was also accused of converting customer's funds to pay for an unauthorized stock purchase and caused another customer to sustain a loss of approximately $400,000.

Blue Line Brewery recently expanded to 43 Maple St. For details, view earlier story.