The chief executive of investment bank Rubin Investment Group pleaded guilty to securities fraud in connection with the acquisition and sale of shares of small-cap companies, U.S. prosecutors said on Thursday.

Dan Rubin, who was also the CEO of attorney referral service 1-800-ATTORNEY Inc., agreed to forfeit $2 million and pleaded guilty in a federal court on Wednesday, making it the final plea by the senior management of the investment bank that once had offices in Los Angeles, Manhattan and Florida, the U.S. Attorney's Office in Brooklyn said in a statement.

Three other former employees of the firm have already pleaded guilty to securities and conspiracy charges. Each defendant faces a maximum sentence of 25 years, prosecutors said.

Under Rubin's direction, a group of employees at 1-800-ATTORNEY induced several companies, or their big shareholders, to sell large blocks of stock to Rubin Investment Group at discounted prices, the prosecutors said.

After acquiring stock from dozens of small-cap public companies, Rubin sold the stock in the open market at a substantial profit, while simultaneously driving down the price of the stock, prosecutors said.

The fraudulent acquisition and sale of shares occurred between August 2002 and October 2003, prosecutors said.

Rubin admitted that he told his staff to promise the small-cap companies that he would recommend their stock to Rubin Investment Group's investors and that he would not sell their stock in the open market, prosecutors said.

"The defendants profited by victimizing small, publicly-held companies and the investing public," U.S. Attorney Roslynn Mauskopf said.