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Bryan Laurienti was a broker for the now (mercifully) defunct Hampton Porter brokerage house, one of San Diego's smelliest, which went out of business a dozen years ago. According to Courthouse News Service, the 9th Circuit appeals court ruled that he deserves 40 months in prison.

The firm was convicted of running a "pump and dump" scheme, by which brokerage houses or brokers pressure clients to buy stock and not sell it; then the villains dump their own stock at inflated prices. Laurienti and other brokers didn't deny the scheme existed, but originally claimed they didn't participate. Laurienti was sentenced to 40 months in prison; later it was dropped to 36 months by the appellate court.

In this go-round, Laurienti claimed that the lower court should have held a hearing on whether he knew about Rule 10b-5 of the Securities Act. This makes it illegal for brokers to defraud clients. The appellate court was incredulous that an experienced broker would be ignorant of this basic rule, although as someone who wrote about Hampton Porter, I wouldn't be surprised if it didn't tell its brokers about the rule. But anyone with an ounce of common sense would know it is wrong to defraud customers.

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