FIRMS FINED ABN AMRO Clearing Chicago LLC (CRD #14020, Chicago, Illinois) ABN AMRO Clearing Chicago LLC consented to a censure and $95,000 fine for allegedly failing "to report short interest positions to the New York Stock Exchange and FINRA on certain settlement dates, and submitt[ing] to FINRA an inaccurate short-interest position report." FINRA found that the firm's supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to the applicable securities laws and regulations, and FINRA and NASD rules, concerning short-interest reporting."
Aufhauser Securities, Inc. (CRD #39673, New York, New York) Aufhauser Securities, Inc. consented to a censure and $17,500 fine for allegedly failing to "transmit Reportable Order Events to the Order Audit Trail System on 30 business days."
Auriga USA, LLC (CRD #121731, New York, New York) Auriga USA, LLC has consented to a censure and $10,000 fine for allegedly failing to "report to the Trade Reporting and Compliance Engine the correct trade execution time for transactions in TRACE-eligible securitized products."
BNP Paribas Securities Corp. (CRD #15794, New York, New York) BNP Paribas Securities Corp. consented to a $5,000 fine for allegedly failing, "within 30 seconds after execution, to transmit to the FINRA/NASDAQ Trade Reporting Facility last sale reports of transactions in national market system securities, and fail[ing] to designate through the FNTRF three of such reports as late."
brokersXpress LLC (CRD #127081, Chicago, Illinois) brokersXpress LLC consented to a censure and $10,000 fine for allegedly transmitting "ROEs to OATS that OATS rejected for context or syntax errors. The findings stated that the reports were repairable, but the firm failed to repair a majority of these rejected ROEs."
CapWest Securities, Inc. (CRD #30002, Greeley, Colorado) CapWest Securities, Inc. consented to a censure and $50,000 for allegedly promoting "the use of Section 1031 of the Internal Revenue Code...or tenant-in-common investments without providing a sound basis for evaluating the facts regarding them, and promoted positive features of TICs in a way that was not fair and balanced." According to FINRA, the firm "failed to provide the requisite balanced disclosures of the risk associated with TIC investments."
Ceros Financial Services, Inc. (CRD #37869, Rockville, Maryland) Ceros Financial Services, Inc. consented to a censure and $15,000 fine for allegedly "prepar[ing] inaccurate month-end general ledgers, trial balances and net capital computations because the firm incorrectly treated short-term, month-end cash transfers from an affiliate as an allowable asset."
Commonwealth Equity Services, Inc. dba Commonwealth Financial Network (CRD #8032, Waltham, Massachusetts) Commonwealth Equity Services, Inc. doing business as Commonwealth Financial Network has consented to a censure and $250,000 fine for allegedly not updating its email supervisory system software to properly surveil the "outgoing doing business as (DBA) emails of registered representatives in the firm's branch offices or forwarding a sampling of those emails to the firm's compliance department for review." According to FINRA, the firm ultimately failed "to establish and maintain systems and procedures that were reasonably designed to comply with its obligation to review email."
CV Brokerage, Inc (CRD #462, West Conshohocken, Pennsylvania) CV Brokerage, Inc consented to a censure and $7,500 fine for allegedly failing "to transmit ROEs to OATS on 114 business days."
Global Hunter Securities, LLC (CRD #123003, New Orleans, Louisiana) Global Hunter Securities, LLC consented to a censure and $35,000 fine for allegedly failing to "establish anti-money laundering (AML) procedures reasonably designed to detect, investigate and report, as applicable, suspicious activity involving receipts and sales of penny-stock securities."
Goldman Sachs Execution & Clearing, L.P. (CRD #3466, New York, New York) Goldman Sachs Execution & Clearing, L.P. consented to a censure and $325,000 fine and is required to revise its WSPs. The firm allegedly "failed to address that certain options market maker clients of the firm had, on a number of occasions, sold short a security on the same day that they were notified that they were being 'bought in' by the firm in that same security,...in an effort to meet its close-out obligations." According to FINRA, the firm's "supervisory policies and procedures did not provide for supervision reasonably designed to achieve compliance with the applicable securities laws and regulations."
Investors Capital Corp. (CRD #30613, Lynnfield, Massachusetts) Investors Capital Corp. has consented to a censure and $100,000 fine for allegedly failing to "ensure delivery of exchange-traded fund prospectuses to customers" and failing to "establish an adequate supervisory system, including WSPs, concerning the sale of ETFs and the firm's obligations to provide ETF prospectuses to customers."
ITG Inc. (CRD #29299, New York, New York) ITG Inc. consented to a censure and $7,500 fine for allegedly effecting "transactions in securities while a trading halt was in effect with respect to each of the securities."
John Carris Investments LLC (CRD #145767, New York, New York) John Carris Investments LLC consented to a censure and $7,500 fine for allegedly failing "to timely report ROEs to OATS."
Morgan Stanley & Co. LLC (CRD #8209, New York, New York) Morgan Stanley & Co. LLC consented to a censure and $100,000 fine for allegedly failing to "establish and maintain a separate supervisory system, including written procedures, to supervise the firm's private wealth management investment representatives with respect to their servicing of bank accounts maintained at a non-member affiliate." According to FINRA, "[t]here was not a separate supervisory system or procedures in place that specifically governed the supervision of the investment representatives' servicing of the bank accounts."
Olivetree USA, LLC (CRD #154026, New York, New York) Olivetree USA, LLC consented to a censure and $10,000 and is required to revise its WSPs. According to FINRA, the firm "failed to transmit ROEs to OATS on 112 business days" and the "firm's supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to the applicable securities laws and regulations, and FINRA rules, concerning OATS reporting."
Peraza Capital and Investment, LLC (CRD #117851, Saint Petersburg, Florida) Peraza Capital and Investment, LLC consented to a censure and $10,000 fine for allegedly failing to "report transactions in TRACE-eligible securitized products to TRACE within the required time period."
Piper Jaffray & Co. (CRD #665, Minneapolis, Minnesota) Piper Jaffray & Co. consented to a censure and $17,500 fine for allegedly failing to "report the correct trade execution time[s]" for various transcations "to TRACE, fail[ing] to report S1 transactions in TRACE-eligible securities to TRACE within 15 minutes of the execution time," and "fail[ing] to show the correct execution time on the memoranda of brokerage orders."
RBC Capital Markets Arbitrage, S.A. (CRD #121263, New York, New York) RBC Capital Markets Arbitrage, S.A. consented to a censure and $7,500 fine for allegedly "incorrectly captur[ing] its order execution times."
Scottrade, Inc. (CRD #8206, St. Louis, Missouri) Scottrade, Inc. consented to a censure and $10,000 fine for allegedly transmitting "reports to OATS that contained inaccurate, incomplete or improperly formatted data."
SunGard Brokerage & Securities Services LLC (CRD #104162, Geneva, Illinois) SunGard Brokerage & Securities Services LLC consented to a censure and $15,000 fine for allegedly failing to "establish, maintain, and enforce written policies and procedures reasonably designed to prevent the execution or display of a short sale order of a covered security at a price that is less than or equal to the current national best bid."
Tradition Asiel Securities Inc. (CRD #28269, New York, New York) Tradition Asiel Securities Inc. consented to a censure and $36,000 fine for allegedly failing to correctly capture its order execution times.
Tullett Prebon Financial Services LLC (CRD #28196, Jersey City, New Jersey) Tullet Prebon Financial Services LLC consented to a censure and $32,500 fine allegedly for failing to correctly capture its order execution times.
Weeden & Co. L.P. (CRD #16835, Greenwich, Connecticut) Weeden & Co. L.P. consented to a censure and $60,000 fine for allegedly transmitting "reports to OATS that should not have been reported."
WFG Investments, Inc. (CRD #22704, Dallas, Texas) WFG Investments, Inc. consented to a censure and $17,500 fine and is required to "revise its WSPs." The firm allegedly "transmitted ROEs to OATS that OATS rejected for context or syntax errors. The findings also stated that the reports were repairable, but the firm failed to repair a majority of these rejected ROEs."
INDIVIDUALS FINED
Mark Edward Imbertson (CRD #3129214, Jupiter, Florida) Mark Edward Imbertson consented to a $20,000 deferred fine and has been suspended from association with any FINRA member in any capacity for five months for allegedly inappropriately recommending "that two customers purchase inverse exchange-traded funds (short ETFs) as a long-term hedge against a potential downturn in the equities markets." According to FINRA, "Imbertson lacked a sufficient understanding of the attributes and risks of the short ETFs to form a reasonable basis upon which to recommend the purchases."
INDIVIDUALS BARRED
Robert Christian Acri (CRD #1429736, Winnetka, Illinois) Robert Christian Acri has been barred from association with any FINRA member in any capacity for allegedly providing "a partial but incomplete response" to FINRA's request for documents in relation to an investigation "concerning his involvement in the sale of alternative investments, including promissory notes, that had defaulted." According to FINRA, the responses Acri provided "did not substantially comply with all aspects of the request, and the information and documents he failed to provide were material to FINRA's investigation."
Jeffrey Scott Davis (CRD #3081852, Virginia Beach, Virginia) Jeffrey Scott Davis has been barred from association with any FINRA member in any capacity for allegedly "convert[ing] $116,976.69 from the brokerage accounts of member firm customers for his personal use and benefit."
Reniero Castillo Francisco (CRD #1844351, Newport Coast, California) Reniero Castillo Francisco has been barred from association with any FINRA member in any capacity for allegedly failing "to provide FINRA with requested information and documents and fail[ing] to appear for an on-the-record interview. The findings stated that Francisco's failure to cooperate impeded FINRA's investigation."
Daniel Howard Glick (CRD #2175655, Chicago, Illinois) Daniel Howard Glick has been barred from association with any FINRA member in any capacity for allegedly failing to provide requested documents and information to FINRA for an investigation concerning claims that "Glick forged clients' signatures on letters to a bank in order to gain access to, and misappropriate, their assets."
Jacob Paul Hanson (CRD #6129533, Fremont, Nebraska) Jacob Paul Hanson has been barred from association with any FINRA member in any capacity for allegedly receiving $1,000 from an insurance customer to pay for a business liability insurance premium but then using that payment "for his own personal use." Additionally, "[i]n order to make his monthly quota, Hanson sometimes marked as received premiums that he intended to pay on behalf of his customers at a future date."
William Robert Hartnett (CRD #3159092, Weymouth, Massachusetts) William Robert Hartnett has been barred from association with any FINRA member in any capacity for allegedly withdrawing over $267,000 from children's accounts of whom he was appointed the sole guardian, and then converting "many of the funds to his own use, in contravention to his duty to preserve and use the funds for the children's benefit."
Nicholas Adam Hill (CRD #5992761, Parkville, Maryland) Nicholas Adam Hill has been barred from association with any FINRA member in any capacity for allegedly withdrawing $8,000 from customer bank accounts without the customers' authorization and then using these funds for personal use. "Hill's member firm's affiliate bank terminated his employment after discovering the unauthorized withdrawals and provided restitution to the customers."
Darinn Dwight Kim (CRD #4029402, Rolling Meadows, Illinois) Darinn Dwight Kim has been barred from association with any FINRA member in any capacity for allegedly misusing "a customer's funds by transferring the funds, selling the customer's securities and ordering a $190,000 check drawn on the customer's securities account without authorization." According to the findings, while the customer was out of the country, Kim transferred $100,000 "from the customer's personal, non-securities account at a bank to a personal, non-securities account that the customer maintained at another bank." Kim then "wrote a $90,000 check payable to himself from the account and forged the customer's signature on the check." Additionally, it was found that "Kim electronically transferred $100,000 from the customer's securities account to her bank account and sold $185,885 in securities from the customer's securities account, both without the customer's authorization, and ordered a $190,000 check to be drawn from the customer's securities account." He then instructed that the check be delivered to his home address. "The customer discovered the transactions and was able to stop payment on the $190,000 check before it was cashed."
Rochelle Maureen Matthews (CRD #2831140, Greenfield, Wisconsin) Rochelle Maureen Matthews has been barred from association with any FINRA member in any capacity for allegedly, along with another payroll associate, "manipulat[ing] her member firm's payroll system and caus[ing] payments to be made to them to which they were not entitled." In total, Matthews converted over $800,000.
Monte Kim Miron (CRD #853546, Broken Arrow, Oklahoma) Monte Kim Miron has been barred from association with any FINRA member in any capacity for allegedly making "unauthorized trades in the accounts of his member firm's customers." Additionally, FINRA found that "Miron was the subject of credit compromises that required reporting on his Uniform Application for Securities Industry Registration or Transfer (Form U4). " However, "Miron willfully failed to timely update his Form U4 by disclosing the credit compromise."
Timothy Damien Moran (CRD #2326078, Paradise Valley, Arizona) Timothy Damien Moran has been barred from association with any FINRA member in any capacity and ordered to disgorge $200,000 for allegedly engaging in "private securities transactions without providing his member firm with prior written notice." Moran introduced his customers to an individual "possible investment in the individual's hedge fund" and some of these customers then invested "approximately $1.69 million in the hedge fund." Moran received over "$200,000 as compensation for his assistance in obtaining investments in the hedge fund."
Khoi Danh Nguyen (CRD #4640647, Jacksonville, Florida) Khoi Danh Nguyen has been barred from association with any FINRA member in any capacity for allegedly conducting "improper credit inquiries and falsif[ying] and submitt[ing] to an affiliated insurance company automobile insurance applications and corresponding consolidated insurance profile reports." Then "[i]nstead of utilizing the credit reports for the customers seeking insurance coverage, Nguyen used the credit reports of persons who did not have an insurable interest in one or more of the insured vehicles on the policy."
Matthew John Ortman (CRD #2734101, Jacksonville, Florida) Matthew John Ortman has been barred from association with any FINRA member in any capacity for allegedly failing to appear for testimony for a FINRA investigation "concerning the possible falsification of records and failure to timely amend his Form U4 to reflect tax liens and a customer complaint."
Bruce Rocasalvo (CRD #1266236, Tinley Park, Illinois) Bruce Rocasalvo has been barred from association with any FINRA member in any capacity for allegedly refusing to appear for "a FINRA-requested-on-the-record interview."
Bernardita Cortez Roque (CRD #3116405, Virginia Beach, Virginia) Bernardita Cortez Roque has been barred from association with any FINRA member in any capacity for allegedly referring "customers to a private investment company that offered private placement investments without her member firm's knowledge or permission." Additionally, Roque allegedly failed to provide "FINRA-requested documents and information pertaining to its investigation."
Jeffrey Dean Schrader (CRD #3092638, Philadelphia, Pennsylvania) Jeffrey Dean Schrader has been barred from association with any FINRA member in any capacity for allegedly participating "in the sale to investors of secured three-year corporate notes an entity issued" without first "providing any written notice to, or receiving written approval from the firm." Furthermore, it was found that Schrader failed to "disclose his receipt of commissions to his firm" and failed to "conduct reasonable due diligence into the product." Finally, it was found that "Schrader provided false information to FINRA during an on-the-record interview concerning the number of transactions in which he was involved, the amount of selling compensation he actually received, and the solicited nature of the transaction."
William Bruce Smith (CRD #1335193, Uxbridge, Massachusetts) William Bruce Smith has been barred from association with any FINRA member in any capacity and ordered to disgorge $74,000 plus pre-judgment interest for allegedly converting "$100,000 from a customer at his member firm by recommending she withdraw $100,000 from her brokerage account at his firm and turn the funds over to Smith, who was to use that money to purchase CDs for her." Smith then used the funds for his business, "which was in financial distress."
Robert Kelly Themm (CRD #2886714, Saginaw, Michigan) Robert Kelly Themm has been barred from association with any FINRA member in any capacity for allegedly soliciting and receiving "$2,500 from a customer, purportedly to enter into a joint purchase of at least one antique medal coin from another registered representative who was a collector of such coins." According to FINRA, "Themm never purchased the antique medal coin and converted the $2,500 to pay his bills and other personal expenses." Themm also allegedly provided "false, misleading and incomplete statements, and failed to provide certain records to FINRA."
Jeremy Gerald Tintle (CRD #2817173, Hawley, Pennsylvania) Jeremy Gerald Tintle has been barred from association with any FINRA member in any capacity for allegedly participating in "a private securities transaction outside the scope of his association with his member firm without providing the firm with prior written notice of the proposed transaction, his proposed role in it, or the selling compensation he may receive from it." According to FINRA, Tintle " recommended that a customer invest in a limited partnership without reasonable grounds to believe that the recommendation was suitable, as its speculative and illiquid nature was inconsistent with the customer's other security holdings, financial situation and needs." Furthermore, Tintle "misapplied customer funds by inducing customers to withdraw funds from their brokerage accounts and wire the funds to third parties as Tintle directed." These funds were then "not applied to the purchase of securities as the customers intended but were retained by the transferees." When Tintle's firm found out about Tintle's alleged misconduct, it terminated his employment.
Wei-Sheng Wang (CRD #2253377, Warren, New Jersey) Wei-Sheng Wang has been barred from association with any FINRA member in any capacity for allegedly, along with his wife, "accept[ing] currency in excess of $130,000 from customers of his member firm's affiliate insurance company for traditional life insurance product premium payments." According to FINRA, with his wife's assistance, Wang "intentionally structured cash deposits received from customers through personal bank accounts his wife controlled in increments of less than $10,000 to avoid Federal reporting requirements." By depositing these customer funds into a personal account, Wang "commingled personal funds with customer funds." As a result, Wang violated his firms written policies. Wang also allegedly "submitted false information on insurance applications, which were approved by the insurance company and on which he earned commissions."
Blair Alexander West (CRD #2647767, Southampton, New York) Blair Alexander West has been barred from association with any FINRA member in any capacity for allegedly misusing company funds for personal expenses. "This matter has been appealed to the SEC and the bar is in effect pending review."
Stephen Grivas (CRD #1829703, Jericho, New York) Stephen Grivas has been barred from association with any FINRA member in any capacity for allegedly withdrawing $280,000 of investor funds without authorization "with the intent to permanently deprive a fund created in anticipation of an IPO, of some or all of the funds." The matter "has been appealed to the NAC and the sanction is not in effect pending review."
Kent George Lehman (CRD #5071373, Orange, California) Kent George Lehman has been barred from association with any FINRA member in any capacity for allegedly failing to "provide FINRA with requested information and documents." FINRA found that "Lehman improperly borrowed money from a customer and then falsely represented to his member firm in a sales questionnaire that he had not." The matter "has been appealed to the NAC and the sanction is not in effect pending review."
COMPLAINTS FILED
Christopher Bradford Birli (CRD #4366441, Buffalo, New York) and Patrick Walter Chapin (CRD #2149171, East Amherst, New York) Christopher Bradford Birli and Patrick Walter Chapin have been named in a FINRA complaint that alleges "they carried out a scheme together over more than seven years to evade, circumvent, and thwart their member firm's policies and procedures." According to the complaint, the defendants "concealed their misconduct by, among other things, submitting false, misleading, and incomplete paperwork; using personal emails to communicate with customers and an entity; and by making false and misleading statements to firm personnel." As a result of the misconduct, Birli and Chapin received "commissions to which they were not entitled, their customers were exposed to additional liquidity and death benefit risks, some customers were actually harmed by their strategy, and the firm was prevented from properly reviewing the transactions for suitability." Birli and Chapin have allegedly "failed to cooperate with FINRA's investigation by failing to appear and provide on-the-record testimony or respond to requests for information and documents; and to date, neither have provided the requested information and documents nor appeared for their on-the-record interviews."
Barry John Milinovich (CRD #2873433, Loveland, Ohio) Barry John Milinovich has been named in a FINRA complaint for allegedly making "unauthorized withdrawals of funds, totaling $10,100, from the savings account of a customer of the affiliate bank of his member firm and convert[ing] the funds for his own use." Additionally, according to the complaint, "Milinovich failed to appear for FINRA-requested testimony."
Catherine E. Poole (CRD #1924882, Holland, Pennsylvania) According to the FINRA complaint, Catherine E. Poole "received emails from an imposter posing as a customer of her member firm requesting two wire transfers totaling $31,500 from the customer's account to a third-party bank account" and "despite the firm's requirement that firm personnel verbally confirm wire instructions, Poole...made inaccurate entries in the firm's Web Access, Status and Approval of Request (ASAP) system, falsely representing that she verbally confirmed the wire requests with the customer."
Don-Mario Oved Saint-Paul (CRD #5467633, Westbury, New York) According to the FINRA complaint, Don-Mario Oved Saint-Paul "willfully failed to timely disclose criminal felony charges on his Form U4 and willfully failed to make any disclosure of a subsequent felony guilty plea."
FINRA Fines Triad Advisors and Securities America a Total of $1.2 Million for Consolidated Reporting Violations FINRA has sanctioned and fined Triad Advisors and Securities America "$650,000 and $625,000, respectively, for failing to supervise the use of consolidated reporting systems resulting in statements with inaccurate valuations being sent to customers, and for failing to retain the consolidated reports in accordance with securities laws." Triad has also been ordered to "pay $375,000 in restitution."
FINRA and BATS Order Citigroup Global Markets Inc. to Pay $1.1 Million for Illegal Short Selling in Advance of Five Public Offerings and for Related Supervisory Violations FINRA and BATS Exchange, Inc. have announced "they have jointly ordered Citigroup Global Markets Inc. to pay approximately $1.1 million in connection with short selling ahead of participating in five public offerings of securities." Citigroup "neither admitted nor denied the charges, but consented to the entry of FINRA and BATS' findings."
FINRA Fines LPL Financial LLC $950,000 for Supervisory Failures Related to Sales of Alternative Investments FINRA has fined LPL Financial LLC "$950,000 for supervisory deficiencies related to the sales of alternative investment products, including non-traded real estate investment trusts (REITs), oil and gas partnerships, business development companies (BDCs), hedge funds, managed futures and other illiquid pass-through investments." According to FINRA, from 2008 to 2012 LPL failed to "adequately supervise the sales of alternative investments" and "did not adequately train its supervisory staff to analyze state suitability standards as part of their suitability reviews of alternative investments." To settle this matter, "LPL Financial LLC neither admitted nor denied the charges, but consented to the entry of FINRA's findings."
