The Financial Industry Regulatory Authority (FINRA) issues a report on disciplinary and other actions involving registered brokers, investment advisers and brokerage firms every month.
If you have questions about losses in your brokerage account call us at 561 391 1900 to discuss your legal rights or visit our website for more information.
Here are some of the most significant actions for June 2013. Follow this link to the FINRA website for all of the June 2013 disciplinary actions as well as those for prior periods.
FIRMS FINED
Ameriprise Financial Services, Inc. was censured and fined $525,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it was required to provide each of its customers who purchased a mutual fund with a prospectus for that fund no later than three business days after the transaction. The findings stated that the firm contracted with third-party service providers for delivery of mutual fund prospectuses. On a daily basis, the firm provided he service providers with electronic information regarding mutual fund transactions requiring delivery of a prospectus to its customers, but the firm did not have any systems or procedures requiring daily or weekly review of the providers’ performance. The firm’s
procedures did require monthly review of a sample of transactions, but did not specifically describe what the reviewer was required to look for or what actions the reviewer was required to take in the event that prospectus delivery deficiencies were identified. The number of transactions included in the reviewed sample was likely too small to provide an accurate assessment of the service providers’ performance. The findings also stated that the primary cause of the late deliveries was the failure of certain mutual fund
companies to maintain adequate supplies of paper copies of prospectuses. As a result, for many purchases from these fund companies, the service providers could not obtain a
prospectus to provide to the customer on time. The findings also included that the firm did not take actions to ensure that all of its customers were receiving prospectuses on time.
Because of the firm’s failure to deliver prospectuses on time to a significant number of customers who purchased mutual funds, these customers were not provided with important disclosures about these products by settlement date.
FINRA found that the firm executed more than 15,000,000 mutual fund purchase transactions that required it to deliver a mutual fund prospectus, or a summary prospectus, to the purchasing customer. As such, the firm was required to establish, maintain and implement a supervisory system and WSPs reasonably designed to monitor and ensure the timely delivery of mutual fund prospectuses. The firm’s WSPs did not require an adequate review of the service providers’ performance of their prospectus delivery obligations. (FINRA Case #2011029100301)
Archipelago Securities L.L.C. Chicago, Illinois, was censured and fined $75,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it transmitted Reportable Order Events (ROEs) to the Order Audit Trail System (OATSTM) that OATS rejected for context or syntax errors and were repairable, but the firm failed to repair some of the rejected repairable ROEs, so it failed to transmit them to OATS during the review period. The findings stated that the
firm transmitted Route or Combined Order/Route reports to OATS that OATS was unable to link to the related order routed to NASDAQ or was unable to link to the corresponding new order transmitted by the destination member firm due to inaccurate, incomplete or improperly formatted data. The findings also stated that the firm failed to enforce its WSPs, which specified that a designated supervisor would review rejections, make necessary repairs, and document the reason for any rejection and the date of repair submission. The findings also included that the firm submitted numerous erroneous New Order reports to OATS. (FINRA Case #2009018534701)
BGC Financial, L.P. New York, New York was censured and fined $40,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of
findings that it failed, within 30 seconds after execution, to transmit to the FINRA/NASDAQ Trade Reporting Facility® (FNTRF) last sale reports of transactions in designated securities and failed to designate through the FNTRF some last sale reports as late. The findings stated that the firm failed, within 30 seconds after execution, to transmit to the Over-the- Counter Trade Reporting Facility (OTCRF) last sale reports of transactions in OTC equity securities and failed to designate to the OTCRF some last sale reports as late. The findings also stated that the firm failed to report the correct trade execution time for transactions in Trade Reporting and Compliance Engine® (TRACE®)-eligible securities, and failed to report transactions in TRACE-eligible securities to TRACE within 15 minutes of the execution time. The findings also included that the firm failed to show the correct execution time on brokerage order memoranda and failed to report the correct contra-party’s identifier for transactions in TRACE-eligible securities to TRACE. (FINRA Case #2011028352801)
BNP Paribas Securities Corp. also was censured and fined $17,500. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to report to FINRA regulatory matters of which it had notice and, legal settlements of which it had notice within 30 days and also failed to timely file with FINRA copies of private civil litigations of securities-related matters of which it had notice. The findings stated that when the firm finally made the requisite filings, they were between two months and three-and-a-half years late. (FINRA Case #2011025773401)
Caprock Securities, Inc. -Lubbock, Texas was censured and fined $15,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of
findings that it failed to establish, maintain, and enforce a supervisory system reasonably designed to review and retain its associated persons’ email communications with the public. The findings stated that the firm failed to retain all of its business-related electronic communications in a non-rewritable, non-erasable format.
(FINRA Case #2011025611201)
Capwest Securities, Inc.-Greeley, Colorado) was censured, and fined $50,000.The National Adjudicatory Council (NAC) imposed the sanctions following call for reviewof an Office of Hearing Officers (OHO) decision. The sanctions were based on findingsthat the firm’s advertisements and sales literature failed to uphold FINRA standardsgoverning member communications with the public, including certain content standardsthat apply to all member communications, as well as standards that apply specifically toadvertisements and sales literature. The firm’s advertisements and sales literature routinelyreferenced Section 1031 exchanges (and their potential use to defer capital gains tax dueon the sale of real estate) without providing an explanation of how these exchanges workor a recognition of the requirements and restrictions set forth in the Internal RevenueCode that allow tax-deferral when acquiring tenancy-in-common (TIC) ownership. Giventhe importance of that tax treatment, and the need to determine whether a particularTIC offering would qualify as a like-kind exchange of real property under Section 1031,it was incumbent upon the firm to consistently provide some sense of these factorsto the public.
The findings stated that the firm failed to consistently provide a fair and balanced presentation of the investment potential and risks linked with TIC ownershipof real property in its advertisements and sales literature. The firm made representationsthat highlighted the management-free traits of TIC ownership in itsadvertisements
and sales literature that should have been, but were not,balanced with statementsconcerning certain restraints accompanying TIC ownership. The findings also stated that
the firm’s communications contained improper performance projections which includedunwarranted promises of successful TIC investing, the use of forward-looking statementsconcerning typical TIC investment performance and claims of effortless cash flow. Thefindings also included that the firm exaggerated TIC investment protections, which misledinvestors and exaggerated the degree of oversight and safety afforded to investors in TICsecurities. The firm also improperly used customer testimonials by not disclosing that thetestimonials may not be representative of other clients’ experiences and did not guaranteeany future performance or success. FINRA found that the firm failed to implement its
supervisory system effectively. Although the firm’s principals reviewed and approved all flawed communications that violated the content standards, evidence proved that the firm
did not provide its principals or its registered representatives with adequate training and guidance concerning these standards.
The decision has been appealed to the SEC and the sanctions are not in effect pendingconsideration of the appeal. (FINRA Case #2007010158001)
Dinosaur Securities, L.L.C.– was censured and fined $10,000.
Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it acted in a principal capacity for all transactions in corporate bonds, agency debt and securitized products (TRACE-eligible securities), although the firm’s memoranda of the orders did not indicate the capacity in which the firm acted in the transaction. The findings stated that in FINRA’s review of transactions in TRACEeligible securities, the firm incorrectly reported the time the trade was executed and incorrectly reported the buy/sell indicator. The findings also stated that FINRA’s review of TRACE reports that included an incorrect execution time found that some of the trades were actually reported late, when the correct execution time was considered. (FINRA Case #2012030413001)
Global Financial Services, L.L.C. -was censured, fined $42,500 and required to pay $16,931.30, plus interest, in restitution to customers. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to sell corporate bonds to customers at prices that were fair, taking into consideration all relevant circumstances, including market conditions with respect to each bond at the time of the transaction, the expense involved and the firm’s entitlement to a profit. The findings stated that the firm failed to provide adequate supervision reasonably designed to achieve compliance with applicable FINRA rules concerning corporate bond pricing in that the firm failed to detect these transactions. (FINRA Case
#2009017442601)
JHS Capital Advisors, Inc. Tampa, Florida–was censured and fined $22,500. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it incorrectly reported the second leg of numerous riskless principal transactions as agent to the FNTRF in violation of FINRA Rule 7230A(d)(7). The findings stated that the firm failed to enforce its WSPs, which specified that the trade desk supervisor would, on a daily basis, review the consistency and completeness of the firm’s
trade reporting and document such review by initialing the applicable documents reviewed.
(FINRA Case #2011028196401)
Knight Capital Americas, L.P. -Jersey City, New Jersey –was censured, fined $20,000 and required to pay $890.14, plus interest, in restitution to customers. Without admitting or
denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to contemporaneously or partially execute a customer limit order in NASDAQ securities after it traded each subject security for its own market-making account at a price that would have satisfied each customer’s limit order. The findings stated that the firm accepted and held customer market orders, traded for its own account at prices that would have satisfied the customer market orders, and failed to immediately thereafter
execute the customer market orders up to the size and at the same price at which it traded for its own account or at a better price. (FINRA Case #2010021721801)
Mizuho Securities USA Inc. -New York, New York-was censured and fined $15,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it served as the managing underwriter of a distribution or offering, other than a secondary offering, and failed to report such distribution or offering to FINRA Market Operations, as required. These distributions or offerings constituted 100 percent of the total number of distributions or offerings the firm had an obligation to report to FINRA. The findings stated that the firm’s supervisory system did not provide for supervision reasonably designed to achieve compliance with applicable securities laws, regulations and FINRA rules concerning FINRA Rule 6760. (FINRA Case #2012031277901)
Montage Securities, LLC -Leawood, Kansas-was censured and fined $15,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it purchased the book of business of an affiliated FINRA broker-dealer, and through the transaction, some new registered representatives became associated with the firm. The findings stated that the firm allowed these representatives to continue to use the email addresses provided by their former broker-dealer. The firm relied upon the other broker-dealer to retain these emails because the firm did not have any way to access these emails other than to request them from the broker-dealer. The findings also stated that the firm failed to perform an adequate review of the emails of its registered representatives for almost a year. The firm’s procedures stated that a principal would conduct an email review monthly, but only one such email review was completed. The findings also included that the review was conducted only on outgoing emails and did not include incoming emails or internal emails. This review was not conducted on emails of all of the associated persons of the firm. (FINRA Case #2012030645501)
Raymond James & Associates, Inc. — St. Petersburg, Florida–was censured, fined $27,500 and required to revise its WSPs regarding compliance with NASD Rule 2440 and IM-2440. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that in transactions, it sold (bought) corporate bonds to (from) customers and failed to sell (buy) such bonds at a price that was fair, taking into consideration all relevant circumstances, including market conditions with respect to each bond at the time of the transaction, the expense involved and that the firm was entitled to a profit. The findings stated that the firm’s supervisory system did not provide for supervision reasonably designed to achieve compliance with applicable securities laws, regulations and FINRA rules concerning compliance with NASD Rule 2440 and IM-2440. The findings also stated that in transactions in TRACE-eligible securities for or with a customer, the firm failed to use reasonable diligence to ascertain the best inter-dealer market, and failed to buy or sell in such market so that the resultant prices to its customers were as favorable as possible under prevailing market conditions. (FINRA Case #2009017412501)
SAL Financial Services, Inc. dba Sterne Agee Financial Services, Inc. — Birmingham, Alabama-was censured, fined $50,000 and required to revise its WSPs regarding best
execution of fixed income securities transactions, TRACE, and receipt, entry and execution of customer orders. The firm has made restitution to the customers in the approximate
amount of $23,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that in transactions for or with a customer, it failed to use reasonable diligence to ascertain the best inter-dealer market, and failed to buy or sell in such market so that the resultant price to its customers was as favorable as possible under prevailing market conditions. The findings stated that the firm’s supervisory system did not provide for supervision reasonably designed to achieve compliance with applicable securities laws, regulations and FINRA rules concerning NASD Rule 2320 (best execution of fixed income securities transactions), NASD Rule 6230 (TRACE), and Rule 17a-3(6) of the Securities Exchange Act of 1934 and NASD Rule 3110 (receipt, entry and execution of customer orders). (FINRA Case #2008014737401)
Securities America, Inc.— La Vista, Nebraska–was censured, fined $100,000, and required to conduct a comprehensive review of its systems for the review of email to ensure that those systems are reasonably designed to achieve compliance with NASD and FINRA rules, and with applicable federal securities laws and rules, and have been adequately revised to address and correct deficiencies. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to have a supervisory system, including written procedures, in place regarding electronic communications with customers that was reasonably designed to achieve compliance with applicable federal securities laws and regulations, and with applicable FINRA and NASD rules. The findings stated that the firm’s email monitoring system did not identify numerous emails sent to customers by registered representatives working in a branch office that contained misrepresentations or misleading statements relating to private placements. Because the firm’s email monitoring system did not identify these emails, the emails were not reviewed by anyone at the firm, including supervisory personnel, to determine whether the emails contained statements that were inconsistent with applicable requirements. (FINRA Case #2010022518105)
Sigma Financial Corporation –Ann Arbor, Michigan–was censured and fined $15,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that a number of the firm’s registered representatives conducted business through entities they independently owned and/or controlled. These representatives conducted their business using “doing business as (DBA)” names. The relevant DBA entities were not registered with FINRA. The findings stated that the firm improperly paid transaction-based compensation to the non-registered DBA entities registered representatives owned, rather than paying compensation, commissions, concessions or fees directly to the registered representatives who effected the securities transactions. The firm paid transaction-based compensation totaling $11,406,377 to nonregistered DBA entities for approximately two years. (FINRA Case #2011025858301)
Wedbush Securities, Inc. -Los Angeles, California–was censured and fined $75,000. Without admitting or denying the allegations, the firm consented to the described sanctions and to the entry of findings that, acting through its CCO, it failed numerous times in connection with FINRA examinations to provide written information and records timely, completely or at all to requests for information made by FINRA. The findings stated that in each of these examinations, FINRA received either no information or records or a late and partial production in response to the first request, necessitating a second request. In a number of instances, FINRA received information and records in response to second requests only after telephone and email communications inquiring about the status of the requests.
Frequently, FINRA calls and emails were unanswered, and firm requests for new due dates were made after the original due dates, when the firm was already in violation of FINRA Rule 8210. The findings also stated that the firm, acting through its CCO, failed to establish a supervisory system and to establish, maintain and enforce WSPs that were reasonably designed to achieve compliance with applicable rules. (FINRA Case #2009020701901)
Wells Fargo Advisors, LLC – St. Louis, Missouri– was censured, fined $50,000, and required to conduct a comprehensive review of its systems, policies and procedures pertaining to the extension of credit to customers by registered representatives to ensure that those policies and procedures are reasonably designed to achieve compliance with FINRA rules and federal securities laws regarding borrowing money from, or lending money to, customers by registered representatives. Without admitting or denying the
findings, the firm consented to the described sanctions and to the entry of findings that it permitted certain customers to borrow money from the firm by withdrawing more funds than were available in the customers’ accounts, through the use of among other things, online payments, checks and debit cards. The registered representatives assigned to the accounts, with the concurrence of the branch managers and the firm’s credit and margin department, determined whether to allow these types of withdrawals to go through.
If the overdrafts were allowed to occur, the customers were responsible for satisfying the overdraft through a same day deposit of funds, wire transfer, or collateral or sale of securities. According to the firm’s policy, if a customer did not satisfy an overdraft on the same day, the debit would not be honored. However, during the time period at issue, the 20 Disciplinary and Other FINRA Actions June 2013 firm allowed exceptions to this policy on an occasional, though not frequent, basis, and permitted overdrafts in situations where customers did not cover the debit on the same day, thereby loaning money to those customers. In those instances, in accordance with the firm’s policies and procedures, if the overdraft was not repaid after a period of time, the unsecured debit was charged against the registered representative’s production. Once an overdraft was charged against a registered representative’s production, the registered representative could request that the debt be sent to collections, through the firm, for recovery from the customer. Amounts recovered from the customer were paid to the
registered representative, minus any collections expenses. The findings stated that by transferring responsibility for the loan to registered representatives and allowing registered representatives to obtain repayment from the customers, the firm caused registered representatives to loan money to customers. The findings also stated that the firm allowed the loans to occur without any system or procedure in place to determine whether the loans met the conditions of FINRA Rule 3240(a) and NASD Rule 2370(a).
Therefore, the firm failed to establish and maintain a supervisory system reasonably designed to achieve compliance with FINRA and NASD rules. The findings also included that customers alleged in writing that a registered representative had made journal transfers of funds to other customers without their authorization. The firm settled one complaint for $16,500 while the other was resolved without a monetary settlement. The firm never reported either of these complaints on the registered representative’s Uniform Application for Securities Industry Registration or Transfer (Form U4), and never disclosed the settlement of the second complaint for more than $15,000. FINRA found that the customer complaints
alleged misappropriation of funds which requires disclosure under NASD Rule 3070 within 10 days. One complaint was not reported until three and one-half months after it was received, while the other was never reported. (FINRA Case #2010022380001)
Individuals Barred or Suspended
David Darrell Anthony -Registered Representative, Mobile, Alabama-was fined $7,500 and suspended from association with any FINRA member in any capacity for six months. The fine must be paid either immediately upon Anthony’s reassociation with a FINRA member firm following his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier. Without admitting or denying the allegations, Anthony consented to the described sanctions and to the entry of findings that he facilitated investors’ tax clients and customers of his member firm involvement in a private securities transaction by introducing, discussing and referring them to an entity for investment purposes. The findings stated that the clients/customers invested a total of $400,000 in the entity by purchasing secured promissory notes offered by the entity, which are now in default. Although the promissory notes were purportedly secured, perfection of the security interest was dependent on the note purchasers’ filing financing statements, and no financing statements were signed by the entity or provided to the purchasers. The client and customers were induced to purchase the promissory notes by the promised return of 9 percent interest rate per annum. The findings also stated that Anthony failed to provide any written notice to his firm of his intention to participate in the sale of these
promissory notes by introducing, discussing and referring his tax clients/customers to the entity, which led to the purchase of the entity’s promissory notes. Nor did Anthony receive written approval from the firm for his involvement. Anthony understood that he could apply for a commission of 1 percent to 2 percent of the amount invested by promissory note purchasers he referred to the entity. The findings also included that Anthony’s recommendation of the entity to a customer, was unsuitable on the basis of the customer’s
other securities holdings, financial situation and needs. Anthony failed to recognize that the customer’s investment in the entity was an overconcentration of her financial holdings.
The $100,000 constituted approximately 56.5 percent of the customer’s liquid worth, resulting in an unsuitable overconcentration of her liquid assets, which exposed her to a
risk of loss that exceeded her risk tolerance and investment objectives.
The suspension is in effect from May 6, 2013, through November 5, 2013. According to FINRA records Anthony was registered with Multi-Financial Securities Corporation from 7/3003- 11/2010. He is not currently registered. (FINRA Case #2010021668703)
Joseph John Antosh Jr. -Registered Representative, Brookfield, Connecticut-was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Antosh consented to the described sanction and to the entry of findings that he failed to provide on-the-record testimony as FINRA requested in connection with an investigation of, among other things, whether Antosh improperly changed the beneficiary of an elderly customer’s individual retirement account (IRA) from the customer’s son to Antosh’s daughter. The findings stated that, through his counsel, Antosh informed FINRA that he did not intend to provide testimony to FINRA. According to FINRA records Antosh worked at Wells Fargo Advisors 7/2003-6/2011 and prior to that was employed by Prudential Securities. He is not currently registered. (FINRA Case #2011028161601).
Steven Robert Aron – Registered Representative, Agoura Hills, California–was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Aron consented to the described sanction and to the entry of findings that through his outside business activity, he facilitated investments on behalf of some of his member firm customers and another customer of his certified public accounting business. The findings stated that Aron combined $325,000 of the customers’ money to invest in a local pawn and jewelry business on their behalf. The customers invested with the expectation of a 9 percent return on their investment. The findings also stated that Aron failed to notify his firm of his participation in his outside business activities and in the customers’ investments. The findings also included that during the course of FINRA’s investigation into Aron’s outside business activities and private securities transactions, it requested information and documentation from Aron. Aron complied with one request but refused to comply with a second request and informed FINRA that he would not respond to any future requests. FINRA records indicate that Aron is not currently registered and that he previously was registered with Financial West Group (5/2011-6/2011), Soutwest Securities, Inc. (12/2008-5/2010) and M. L. Stern (10/2003-12/2008) (FINRA Case #2011028382801)
Ronald Allen Bundy -Registered Representative, Raeford, North Carolina-was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Bundy consented to the described sanction and to the entry of findings that he received insurance premium payments totaling approximately $8,043 from insurance customers. Upon receipt of these payments, Bundy had an obligation to immediately remit these payments to the insurance company by depositing them in the insurance company’s designated bank account. However, Bundy intentionally misappropriated and converted these funds by refusing to deposit them into the insurance company’s designated bank account. Rather, Bundy withheld the customers’ premium payments for several months as bargaining collateral against what he felt the insurance company owed him. Bundy finally remitted the $8,043 to the insurance company. According to FINRA records, Bundy wrked for Allstate Financial Services 8/2011-3/2012 and is not currently registered. (FINRA Case #2012031948601)
John Sebastion Cangialosi Jr. -Registered Representative, Manalapan, NewJersey- was fined $5,000 and suspended from association with any FINRA member in any capacity for three months. Without admitting or denying the findings, Cangialosi consented to the described sanctions and to the entry of findings that he failed to disclose, and in some instances to timely disclose, unsatisfied judgments and liens on his Form U4.
The suspension is in effect from May 20, 2013, through August 19, 2013. According to FINRA records, Cangialosi is currently employed by Joseph Gunnar & Co. He was previously registered with Brookstone Securities and prior to that J.P. Turner & Company. (FINRA Case #2011029919601)
Fernando Castillo –Registered Representative, Colonia Polanco Mexico DF–was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Castillo consented to the described sanction and to the entry of findings that he failed to appear for FINRA on-the-record interviews in connection with its investigation into an alleged contract between Castillo and a customer, to which his member firm was not a party. FINRA informed Castillo that if he failed to appear, he could be subject to a disciplinary action and the imposition of sanctions, including a bar. FINRA records indicate Castillo is not currently registered and that he has previously worked for GBM International, Inc, UBS Financial Services and Actinver Securities. (FINRA Case #2012032983501)
James Merle Culbertson -Registered Representative, Oakdale, Minnesota-was fined $20,000 and suspended from association with any FINRA member in any capacity for 12 months. The fine must be paid either immediately upon Culbertson’s reassociation with a FINRA member firm following his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier. Without admitting or denying the findings, Culbertson consented to the described sanctions and to the entry of findings that he had conversations with customers concerning securities transactions he was recommending; and during the course of these conversations, Culbertson omitted or
misrepresented material information to these customers concerning the transactions. The findings stated that Culbertson circumvented his firm’s supervisory review with respect to mutual fund transactions he effected by failing to submit the appropriate documentation or by submitting incomplete or inaccurate documentation to the firm for review. The firm required its registered representatives, including Culbertson, to complete and submit documentation relating to certain mutual fund transactions. The firm implemented these procedures in order to ensure that it reviewed the proposed transactions for suitability and to ascertain that the registered representative recommended the appropriate share class for purchases. The findings also stated that Culbertson serviced customers’ nondiscretionary accounts. Culbertson received orders from these customers but failed to timely enter the orders for transactions in the customers’ accounts. Instead, without reconfirming the trades with the customers, Culbertson entered the orders in their accounts on a discretionary basis. The findings also included that based on Culbertson’s recommendation, a customer agreed to surrender his variable annuity and purchase a fixed
annuity with the proceeds of approximately $89,346. These transactions were unsuitable for the customer because the customer could withdraw funds from the variable annuity at
any time, the variable annuity had a higher guaranteed fixed rate and death benefit, and the fees associated with the variable annuity were less than those associated with the fixed annuity. FINRA records indicate Culbertson is not currently registered and that he was previously registered with Ameriprise Financial Services and prior to that Pruco Securities.
The suspension is in effect from April 15, 2013, through April 14, 2014. (FINRA Case #2011027468102)
Alfred Patrick Denis IV –Registered Representative, Bellmore, New York was fined $5,000 and suspended from association with any FINRA member in any capacity for 60 days. Without admitting or denying the findings, Denis consented to the described sanctions and to the entry of findings that he retained blank or incomplete securities business-related documents in his office files that customers had previously signed. The documents included switch forms, explanation of transaction forms, disclosure forms, cash distribution forms and annuity surrender forms. Some of the documents were undated and the documents bearing a date ranged from 2007 through 2010, with one bearing a 2001 date. Denis’ member firm prohibited its representatives from obtaining or retaining documents that customers had pre-signed. FINRA records indicate Denis is not currently registered and that he previously worked for Citigroup Global Markets, Ameriprise Financial Services and IDS Life Insurance Company.
The suspension is in effect from May 20, 2013, through July 18, 2013. (FINRA Case #2012031027101)
Peter Girgis — Registered Representative, Staten Island, New York) –was fined $5,000 and suspended from association with any FINRA member in any capacity for three months. Without admitting or denying the findings, Girgis consented to the described sanctions and to the entry of findings that he failed to disclose, and in some instances to timely disclose, unsatisfied judgments and liens on his Form U4. FINRA records indicate Girgis is not currently registered and that he previously has been registered with Joseph Gunnar & Co, Brookstone Securities and J.P. Turner & Company.
The suspension is in effect from May 20, 2013, through August 19, 2013. (FINRA Case #2011029919602)
Todd Lloyd Goedeke — Registered Principal, Howards Grove, Wisconsin–was barred from association with any
FINRA member in any capacity. Without admitting ordenying the allegations, Goedeke consented to the described sanction and to the entry of findings that he failed to respond to FINRA’s request for information and documents related to a FINRA investigation into allegations that he had deposited customer funds into his bank account. FINRA records indicate Goedeke is not currently registered and that he was previously registered with:
- Cantella & Co.
- Raymond James Financial Services
- Offerman & Company
(FINRA Case #2010023741801)
Frederico Goldin –Registered Representative, Aventura, Florida — was fined $5,000 and suspended
from association with any FINRA member in any capacity for one month. The fine must be paid either immediately upon Goldin’s reassociation with a FINRA member firm following
his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier. Without admitting or denying the findings, Goldin consented to the described sanctions and to the entry of findings that he borrowed a total of $28,688.47 from customers although at the time, his firm did not have written procedures that allowed its representatives to borrow money from customers. Goldin has repaid the loans. According to FINRA records Goldin is not currently registered and he previously worked for ITA Financial Services, Global Strategic Investments and Merrill Lynch Pierce Fenner & Smith.
The suspension was in effect from May 6, 2013, through June 5, 2013. (FINRA Case #2011028603001)
Joseph Henry Johnson — Registered Principal, Sayville, New York–was fined $5,000 and suspended from association with any FINRA member in any capacity for 30 days. Without admitting or denying the findings, Johnson consented to the described sanctions and to the entry of findings that he engaged in unsuitable short-term trading and switching of municipal bond closed-ended funds in customers’ joint brokerage account. The findings stated that Johnson recommended that the joint account purchase shares of closed-end municipal bond funds with long-term, conservative objectives and then sell the shares in a relatively short time frame. Johnson frequently switched them with other similar municipal bond closed end funds. The products in question did not have any meaningful differences and the
transactions yielded little to no profit; the joint account suffered losses of approximately $25,000 and was charged approximately $14,000 in commissions. FINRA records indicate that Johnson is currently registered with Vanderbilt Securities. He previously has been registered with:
- Princor Financial Services
- Granite Securities
- Raymond James Financial Services
Th
e suspension was in effect from May 6, 2013, through June 4, 2013. (FINRA Case #2010024001501)
Robert Ronald Liggero — Registered Representative, Atlantic Beach, Florida–was fined $5,000 and suspended from association with any FINRA member in any capacity for 20 business days. Without admitting or denying the findings, Liggero consented to the described sanctions and to the entry of findings that he signed customers’ names on documents related to the opening of authorized IRAs without the customers’ knowledge or consent. FINRA records indicate that Liggero is not currently registered and that he previously was registered with LPL Financial. Prior to that he was registered with Bull & Bear Brokerage Services.
The suspension is in effect from May 20, 2013, through June 17, 2013. (FINRA Case #2011028393301)
Michael Corbett Milne –Registered Principal, Ocala, Florida– was fined $5,000 and suspended from association with any FINRA member in any capacity for 15 business days. Without admitting or denying the findings, Milne consented to the described sanctions and to the entry of findings that he exercised discretion in the customers’ accounts by selling out positions that they held in a stock. Milne had previously discussed, with his customers who
held shares, the strategy of selling this stock if a target price was reached or a downturn seemed likely, and generally obtained approval of this approach. However, Milne did not
obtain the customers’ written authorization or his member firm’s approval to exercise discretion, and in most cases he did not contact customers before selling the stock. According to FINRA records Milne is currently employed by Kovack Securities in Ocala, FL. Previously he was registered with Brokersxpress, LLC and Raymond James Financial Services.
The suspension was in effect from May 20, 2013, through June 10, 2013. (FINRA Case #2011026262301)
Ronald Wayne Nichter –Registered Principal, Greenfield, Indiana–was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Nichter consented to the described sanction and to the entry of findings that he misappropriated approximately $140,000 from customers. The findings stated that in order to carry out the misappropriations, Nichter forged the clients’ signatures on Letters of Authorization that instructed his member firm’s clearing firm to issue checks made payable to the customers. Nichter then intercepted the checks, endorsed them, deposited them into his personal account, and utilized the funds for his personal use without the customers’ knowledge and consent. According to FINRA records, Nichter was last registered with Cantella & Co. Prior to that he was registered with A.G. Edwards and Edward Jones. (FINRA Case #2013036619401)
Jonathan Gordon Sorensen — Registered Representative, Maitland, Florida–was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Sorensen consented to the described sanction and to the entry of findings that he failed to appear for a FINRA on-the-record interview; and, subsequently, through his attorney, informed FINRA that he would not appear for an on-the-record interview. The findings stated that Sorensen’s appearance was requested as part of an investigation into his management of a limited partnership investment fund while associated withhis member firm, and in particular, whether he had converted/misused investor funds and falsified documents in connection with his management of the fund. FINRA records indicate hat Sorenson is not currently registered and that he previously worked for Coker & Palmer . (FINRA Case#2013036459501)
Michael Antonio Zurita — Registered Principal, Orlando, Florida– was suspended from association with any FINRA member in any principal capacity for six months. In light of Zurita’s financial status, no monetary sanction was imposed. Without admitting or denying the findings, Zurita consented to the described sanction and to the entry of findings that he failed to reasonably supervise the sale of unregistered shares of low-priced stock of issuers on behalf of customers. A registered representative effected the sale of the unregistered stocks and failed to conduct a searching inquiry to ensure the sales did not violate Section 5 of the Securities Act of 1933. The representative completed deposited securities request
(DSR) forms and submitted them to Zurita for review. Zurita’s review process primarily involved ensuring the forms had been completed in full, and failed to ensure that the information was accurate, consistent and did not raise any red flags. Zurita relied on the representative to obtain all relevant information and documentation and determine on his own that the shares were registered or exempt from registration, so he failed to ensure the representative complied with the requirements of Section 5 and failed to reasonably supervise the sale of unregistered securities. The findings stated that as the president and CCO of his member firm, Zurita was responsible for developing and maintaining
an adequate supervisory system as well as the firm’s WSPs to ensure compliance with applicable laws. Zurita failed to have procedures in place to prevent the sale of unregistered securities not exempt from registration, and would have identified which individuals were to perform each step of the review and approval process.
The findings also stated that Zurita failed to establish an adequate supervisory system to ensure that unregistered securities were freely tradable. The system was inadequate because it simply required that a principal ensure a DSR form was completed in full, rather than investigate each transaction to determine the existence of any red flags. FINRA records indicate that Zurita is not currently registered and that he was last registered with Orion Trading, LLC. Prior to that he was registered with Great Eastern Securities and Grossman & Co.
The suspension is in effect from April 15, 2013, through October 14, 2013. (FINRA Case #2009019534203)
Rex Securities Law , with offices in Boca Raton, FL, and Austin, TX, provides representation to investors nationwide who are seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.
Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.
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