NJ Brokerage Network 1 Financial, Known For 2,000% IPO Surges, Eyes US Exchange Return After Hiatus

Notorious for guiding the world’s most volatile IPOs in 2022, brokerage firm Network 1 Financial Securities Inc. is gearing up to usher a new group of microcap companies into the U.S. exchanges.

What Happened: The Red Bank, New Jersey-based firm is set to underwrite for Epsium Enterprise Ltd., a Macau-based alcoholic beverage wholesaler, and BRB Foods Inc., a Brazilian snack producer, Bloomberg reported. This marks a comeback after leading only a single deal last year.

In 2022, Network 1 caught the eye of Wall Street when its IPOs, including Chinese companies like Addentax Group Corp. (NASDAQ:ATXG), saw average first-day trading surges of nearly 2,000%, per Bloomberg’s data. However, most firms it underwrote are now trading lower, with a median 88% drop since going public.

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The firm, established in 1983, has previously faced regulatory scrutiny for failing to detect suspicious transactions and insider trading, and for not developing written anti-money laundering programs according to the Financial Industry Regulatory Authority’s records.

Recently, the SEC filed a civil lawsuit against Shawn Huang Shanchun, an alleged indirect owner of Network 1, accusing him of manipulating the price of Future Fintech Group Inc. (NASDAQ:FTFT). Network 1, however, is not named in the lawsuit.

“The case is just beginning, and we are a long way from any evidence being presented to a jury,” said Huang’s lawyer, Jacob Frenkel.

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