The Financial Industry Regulatory Authority (FINRA) is the largest independent regulator for all securities firms doing business in the United States. FINRA’s chief role is to protect investors by maintaining the fairness of the U.S. capital markets.
All stockbrokers and broker dealers (brokerage firms) are required to be licensed by and subject to the rules and regulations of FINRA. Each month FINRA publishes disciplinary actions against brokers and broker dealers. Discipline can range from monetary fines and suspensions, or in extreme cases, revocation of licensing and a bar from the securities industry.
See the FINRA website for current and historical disciplinary actions.
Manny Aizen aka Manuel Aizen (Registered Principal, Dallas, Texas)
Edward Michael Milkie ( Registered Principal, Dallas, Texas)
Daniel Edward Levin (Registered Representative, Dallas, Texas) submitted Offers of Settlement in which they were each fined $30,000. Aizen and Milkie were each suspended from association with any FINRA member in any principal capacity for six months. Levin was suspended from association with any FINRA member in any capacity for five months.
The fines must be paid either immediately upon their reassociation with a FINRA member firm following their suspensions, 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, Aizen, Milkie and Levin consented to the described sanctions and to the entry of findings that Levin made unwarranted and misleading statements and claims concerning investment products on radio shows, and made unbalanced statements on their member firm’s website regarding life settlements.
The findings stated that Levin discussed private placement
securities offerings and promoted them as attractive alternative
investments to his listeners during his radio shows. These offerings
were unregistered securities offered pursuant to the exemptions offered by Rule 506 of Regulation D, and could not be sold through general solicitations and still maintain their exempt status. Levin’s statements about the offerings constituted solicitations, and others he made during his radio show were designed to procure orders for the offerings.
Although the statements did not name the investments specifically, they were part of an overall scheme designed to awaken an interest in the offerings and were the first step in a campaign to sell these securities.
Levin’s statements were not made to customers with whom his firm (or the issuer) had a pre-existing and substantive relationship, but rather broadcast indiscriminately to the general public. After making the statements on the radio show, Levin sold the offerings to customers. Because the securities had lost their exemption from registration under Regulation D as a result of the general solicitation, the sales were impermissible sales of unregistered
securities, in contravention of the Securities Act of 1933.
The findings also stated that Aizen was the firm’s principal responsible for the supervision of Levin and another individual associated with the firm, for approval of their use of radio shows to promote firm products, as well as for their use of a firm website. The findings also included that Aizen approved the publication and contents of the website on life settlements in a certain year. Aizen was the principal primarily responsible for reviewing the contents of the radio shows, but did not regularly review the shows, even after FINRA raised concerns regarding the contents.
Aizen’s review and supervision of the radio shows and the website was inadequate to prevent both the violative advertising made on the shows, as well as the general solicitation to the public that resulted in the firm’s sale of unregistered securities. FINRA found that Milkie failed to adequately supervise the sale of private placements because he failed to conduct adequate due diligence and respond to “red flags” on an issuer’s private placements that their firm offered to customers.
FINRA also found that Milkie, as the firm’s president, was responsible for conducting due diligence on the firm’s behalf, and had supervisory authority over due diligence on the issuer’s offerings, and was responsible for the overall supervision of the firm. The firm, acting through Milkie, failed to conduct an adequate investigation as a basis for its recommendation that customers purchase the offerings, did not adequately verify the issuer’s representations in the offering documents, and did not review other relevant documents of the issuer.
Milkie failed to review third-party due diligence reports that were
available for the issuer’s offerings.
The reports raised numerous concerns and red flags for the offerings. In addition, FINRA determined that the firm engaged in both private placement offerings (Regulation D offerings) and contingent offerings when its WSPs in place did not address the
suitability of recommendations for investments in private placements and the sale of contingency offerings. Milkie, as the firm’s president, was responsible for the firm’s overall supervision.
Aizen’s suspension is in effect from June 17, 2013, through December 16, 2013. Milkie’s suspension is in effect from June 17, 2013, through December 16, 2013. Levin’s suspension is in effect from June 17, 2013, through November 16, 2013.
FINRA records indicate that Aizen is currently employed by Berthel, Fisher & Company Financial Services. Milkie and Levin were previously registered with Berthel Fisher & Company until 09/2012 and neither is currently registered.
(FINRA Case #2009016271801)
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