The Financial Industry Regulatory Authority (FINRA) issues a report on disciplinary and other actions involving registered brokers, investment advisers and brokerage firms every month.
Here are some of the most significant actions for May 2013. Follow this link to the FINRA website for all of the May 2013 disciplinary actions as well as those for prior periods.
American Enterprise Investment Services Inc. -Minneapolis, Minnesotawas censured and fined $20,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to accurately report most changes to its customer positions to the Securities Industry Automation Corporation (SIAC)/ Options Clearing Corporation (OCC) Large Options Position Report (LOPR), in that the firm
caused trade quantities, rather than position quantities, to be reported to LOPR. The firm failed to report one position to the OCC LOPR for 11 consecutive trading days.
The findings stated that the firm failed to accurately report to the OCC LOPR thousands of Social Security numbers or tax identification codes, account names, street address information and expiring options positions. The firm failed to accurately report accounts to the LOPR under common control or acting-in-concert that should have been linked for purposes of in-concert reporting. The findings also stated that the firm failed to establish and maintain a supervisory system, including WSPs, reasonably designed to achieve compliance with rules governing the reporting of large options positions. (FINRA Case #2010021601201).
BNP Paribas Prime Brokerage, 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 failed to promptly file with FINRA the complaints for all of its securities-related civil litigation matters of which it had notice. (FINRA Case #2011025773301)
Boenning & Scattergood, Inc.-West Conshohocken, Pennsylvania was censured and fined $50,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it reported short interest positions when it should not have reported any short interest position for these securities. The findings stated that the firm’s supervisory system did not provide for supervision reasonably designed to achieve compliance with FINRA and NASD rules regarding short-interest reporting. (FINRA Case #2009017884601)
BTG Pactual US Capital, LLC – New York, New York was censured and fined $20,000. Without admitting or denying the findings, the firm consented to the described sanctions
and to the entry of findings that while conducting a securities business, it failed to maintain its minimum net capital required by Securities Exchange Act Rule 15c3-1. The
findings stated that the firm filed a notification with FINRA and the SEC pursuant to SEC Rule 17a-11(b) to report these deficiencies. (FINRA Case #2012030409001)
M.D. Sass Securities, L.L.C. – New York, New York was censured and fined $100,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it distributed marketing materials that contained misleading descriptions of fund investment objectives. Certain of the investment objectives appearing in the communications that it distributed exceeded or failed to accurately capture the stated objective in the applicable private placement memorandum (PPM). The findings stated that the firm distributed marketing materials that contained unsubstantiated and exaggerated claims, misled by containing presentations or statements that were promissory of investment success or failed to reflect the inherent risks associated with investing in funds being promoted, contained unwarranted presentations in that the fund model provided did not have any relevance or correlation to the actual fund that the model was promoting, and/or contained a false and misleading statement regarding the funds. Certain statements were reiterated due to the recurring nature of the communications. The firm distributed marketing materials regarding funds that contained unwarranted performance projections, and failed to provide material disclosure regarding the risks of investing in the hedge fund(s) and/or hedge fund strategies being discussed. The findings also stated that the risk disclosures contained in the communications were not clear and transparent statements of risk, particularly when compared to the disclosures in the relevant PPMs. The firm distributed at least one fact sheet that provided contradictory fund inception dates and distributed varieties of marketing materials that failed to provide a sound basis for evaluating certain of the information presented. Many contained a variety of violations that were continually reiterated as a result of the cyclical nature of the communications. (FINRA Case #2009018187701)
Newport Coast Securities, Inc.– New York, New York 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 failed to enforce its WSPs, which provided that the firm would maintain a restricted list of securities. The firm prohibited trading of any stock on the restricted list absent written permission from its compliance department. The firm’s procedures further provided that it would monitor daily trading to identify transactions in securities of issuers on the restricted list and take action as necessary, which might include inquiring regarding the solicited or unsolicited nature of transactions, canceling transactions or taking other appropriate action. The findings stated that securities from issuers were on the firm’s restricted list but the firm failed to monitor trading adequately to ensure that transactions did not occur in restricted list securities absent the requisite written permission. The firm failed to identify and take action in transactions involving restricted-list securities, which were completed without written permission. (FINRA Case #2010021283501)
NYPPEX, LLC -Rye Brook, New York was censured, fined $10,000, and required to review its supervisory systems and WSPs regarding due diligence into private offerings and the
secondary sale of limited partnerships for compliance with FINRA rules and federal securities laws and regulations. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to establish and maintain a supervisory system and WSPs reasonably designed to ensure that it conducted adequate due diligence into private offerings and the secondary sale of limited partnerships. The findings stated that the firm did not have any WSPs regarding its role as
a finder in private offerings. As a result, the firm intended to act in the role of a finder with respect to offerings, while one of the firm’s representatives recommended the investments to customers, conduct that is inconsistent with the role of a finder. The findings also stated that with respect to the firm’s role in the secondary sale of limited partnerships, its procedures stated that it would not exercise any due diligence of the Regulation D private offerings that it offered to customers because of its limited role in the transactions as a matching service. The firm acted as more than merely an introducing party by directly contacting selected customers regarding the transactions. As a result, the firm was required
to conduct reasonable due diligence into the offerings. (FINRA Case #2011025563801)
Orion Trading, LLC – Orlando, Florida was censured and fined $50,000. FINRA imposed a lower fine after considering, among other things, the firm’s revenues and financial resources. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it participated in the sale of shares of low-priced stock of issuers for customers, which generated proceeds of approximately $385,000 for the
customers. The shares of stock were neither registered with the SEC nor exempt from registration. The findings stated that despite the questionable circumstances surrounding the transactions, the firm failed to conduct a searching inquiry to ensure that the sales did not violate Section 5 of the Securities Act of 1933. The findings also stated that a registered representative completed Deposited Securities Request (DSR) forms and submitted them to the firm, which failed to ensure the information was accurate and consistent and did not raise any red flags. Instead, the firm relied on the representative to obtain all relevant information and documentation and determine that the shares were either registered or exempt from registration. The firm failed to reasonably supervise the sale of unregistered shares of low-priced stock of the issuers on the customers’ behalf. The findings also included that the firm was responsible for establishing and maintaining a supervisory system, including WSPs, to ensure compliance with all applicable securities laws, including Section 5 of the Securities Act of 1933. The firm failed to have procedures in place designed to prevent the sale of unregistered securities that were not exempt from registration, and failed to establish an adequate supervisory system to ensure that unregistered securities were freely tradable.
FINRA found that the firm’s WSPs in effect required the firm to review transaction information, as well as information and reports its clearing firm provided, in an effort to spot red flags of suspicious activity that might be indicative of money laundering.
The procedures required the firm to file SARs when certain questionable activities were identified, including trading or journaling between/among accounts; late-day trading; heavy trading in low-priced securities; unexplained wire transfers, including those to known tax havens; and large deposits of funds or securities. The firm failed to identify, document and take appropriate steps with regard to certain red flags and suspicious activity in accounts involving some customers. Therefore, by failing to identify and investigate suspicious activity, and, where appropriate, file a SAR, the firm failed to implement and enforce an adequate AML program. (FINRA Case #2009019534204)
Southwest Securities, Inc. – Dallas, Texas was censured, fined $77,500, ordered to pay $32,167.14, plus interest, in restitution to customers, and required to revise its WSPs regarding fair and reasonable pricing to customers in municipal bond transactions. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it purchased municipal securities for its own account from customers and/or sold municipal securities for its own account to customers at an
aggregate price (including any markdown or markup) that was not fair and reasonable, taking into consideration all relevant factors, including the best judgment of the broker, dealer or municipal securities dealer as to the fair market value of the securities at the time of the transaction, and of any securities exchanged or traded in connection with the transaction, the expense involved in effecting the transaction, the fact that the broker, dealer or municipal securities dealer is entitled to a profit, and the total dollar amount of the transaction. 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 MSRB rules concerning fair and reasonable pricing to customers in municipal bond transactions. The findings also stated that the firm failed to report some transactions in TRACE-eligible securities to TRACE within 15 minutes of execution time. (FINRA Case #2009018102701
Thomas Weisel Partners, LLC– San Francisco, California was fined $200,000. The sanction was based on findings that the firm failed to establish and maintain a supervisory system and procedures governing principal transactions the firm effected and that, as a result, transactions that had the potential to, and in fact did, pose a serious conflict of interest, were not subject to effective supervisory review. (FINRA Case#2008014621701)
vFinance Investments, Inc. -Boca Raton, Florida was censured and fined $65,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it acted as the private placement agent for a placement of up to $5 million in convertible notes a company issued. Investors, some of whom were the firm’s customers, invested a total of $5,950,000 in the private placement while the issuer was on the firm’s restricted list for the duration of its participation in the offering. A number of customers were solicited to buy the issuer’s stock while the firm was conducting the private placement in violation of Regulation M. The findings stated that the firm did not adequately supervise the purchases of stocks on the restricted list even though the firm’s procedures required it to monitor purchases of securities of issuers on its restricted list, including those for which it was conducting offerings. The firm failed to adequately enforce the procedures and instead authorized customer purchases of the stock without conducting an adequate inquiry into the facts and circumstances surrounding those purchases, thereby failing to reasonably supervise activity in the issuer’s stock in a manner reasonably designed to achieve compliance with Regulation M. The findings also stated that the firm failed to disclose involvement of a statutorily disqualified person who worked closely with firm employees in connection with the private placement, communicating directly with the firm’s investment banking department and others. The findings also included that a registered representative involved in the solicitation of purchases of the stock used his personal email account to solicit purchases of stock and for other business
purposes, and forwarded and addressed some of the emails to firm email addresses of other firm employees, including managerial-level employees. Other than emails sent to or from other firm employees, the firm’s email system did not capture the representative’s emails for retention and review even though the SEC had previously brought charges against the firm and its president for failing to capture, retain and produce emails sent to and from another firm employee who used an outside email account and instant messaging. The firm should have been on heightened awareness of its obligations to supervise the use of external email accounts. FINRA found that the firm did not create and implement procedures reasonably designed to review incoming and outgoing securities-related and investment banking-related correspondence, including electronic correspondence, so it did not adequately supervise employees’ outside email accounts. (FINRA Case #2009016160002)
Adorean Boleancu -Napa, California was barred from association with any FINRA member in any capacity and ordered to pay $650,000, plus interest, in restitution to a customer. Without admitting or denying the findings, Boleancu consented to the described sanctions and to the entry of findings that he converted at least $650,000
from an elderly, widowed customer by issuing checks in the customer’s name without her authorization and issuing those checks to others, including his girlfriend. The findings
stated that the checks were drawn against the customer’s home equity lines of credit that were opened shortly after Boleancu became her financial adviser. After Boleancu converted the funds from the lines of credit, he made unauthorized payments through the customer’s checking account to pay interest accrued on the outstanding balances. The customer was an unsophisticated and inexperienced investor who relied completely on Boleancu’s professional advice and experience for her investments and safekeeping of her financial assets. Boleancu was aware of her lack of experience and sophistication at the outset of their relationship. The findings also stated that Boleancu failed to comply with FINRA requests for documents and information.
FINRA records indicate that Boleancu is no longer registered and that he previously worked for Wells Fargo Advisors, Wells Fargo Investments and Morgan Stanley & Co. (FINRA Case #2011030687701)
Michael Peter Borci -Apollo Beach, Florida was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Borci consented to the described sanction and to the entry of findings that in the course of an investigation, FINRA sought on-the-record testimony from him concerning whether he provided his member firm client with documents overstating that client’s account value. The findings stated that FINRA sent Borci a written request for an on-the-record interview, but he failed to comply with the FINRA request.
FINRA records indicate that Borci previously worked for UBS Financial, Fifth Third Securities and Wachovia Securities. He is not currently registered. (FINRA Case#2012032412801)
Greg John Campbell -Ladue, Missouri was barred from
association with any FINRA member in any capacity. Without admitting or denying the findings, Campbell consented to the described sanction and to the entry of findings that he misappropriated more than $1.7 million from his customers at his member firm, converted more than $1.35 million for his personal use and made unauthorized transfers of approximately $390,000 between customers’ accounts. The findings stated that Campbell misappropriated funds by establishing a Loan Management Account (LMA) in a customer’s name, in most instances without the customer’s knowledge or consent. An LMA operated as a line of credit through which a customer could obtain loans collateralized by securities held in the customer’s advisory account. Campbell then effected wire transfers directly from the customer’s LMA to various third-party accounts servicing his personal debt, including a mortgage, an auto loan and a home-equity line of credit. In some instances, Campbell replaced converted funds by transferring funds between customers’ accounts without their consent. Campbell effected the wire transfers by creating falsified letters of
authorization on which he forged customers’ signatures. To avoid detection, Campbell had customers’ account statements delivered “care of” other, unrelated customers. The findings also stated that after Campbell left his firm and became registered with a new firm, he began misappropriating funds from customers’ accounts at the new firm. Campbell misappropriated at least $532,000 from his new firm customers, converted $365,500 for his personal use and made unauthorized distributions of $165,500 between customers’ accounts. Campbell converted funds by effecting wire transfers and individual retirement account (IRA) distributions directly from customers’ accounts to firm brokerage accounts Campbell and his wife held. It was Campbell’s practice to effect these transactions by creating falsified letters of authorization and IRA distribution requests on which he forged customers’ signatures. To avoid detection, Campbell had customers’ account statements
delivered to residences he owned.
Campbell previously worked for LPL Financial, LLC, Merrill Lynch, & A.G. Edwards & Sons. He is not currently registered.(FINRA Case #2012034193201)
Brady James Castille – Austin, Texas was suspended from association with any FINRA member in any principal capacity for 30 business days. In light of Castille’s financial status, no monetary sanctions have been imposed. Without admitting or denying the findings, Castille consented to the described sanction and to the entry of findings that he was the CCO and designated supervisor of his member firm’s owner and producing manager. The findings stated that Castille became CCO and the producing manager’s supervisor although he did not have any prior experience in a supervisory or compliance role and had not received any relevant training. In fact, Castille had completed the Series
24 exam just prior to accepting the CCO and supervisor positions. The findings also stated that as the producing manager’s supervisor, the firm’s WSPs required Castille to review his trading activity and to ensure that the transactions were suitable and commissions and markups were reasonable. Castille failed to identify and follow up on red flags related to the excessive trading in the producing manager’s accounts. The suspension was in effect from March 18, 2013, through April 29, 2013.
Castille is not currently registered. He previously worked for Merrill Lynch, Birkelbach Investment Securities, and GunnAllen Financial, Inc. (FINRA Case #2011025843302)
Raphael Huaman -Miami, Florida was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Huaman consented to the described sanction and to the entry of findings that he misappropriated a total of $134,047.65 from different bank trust accounts at his member firm’s affiliate.
The findings stated that Huaman misappropriated the funds by having a colleague transfer money from the bank trust accounts to a separate affiliate account. Huaman requested and obtained checks drawn on these accounts made out to third-party payees and deposited the checks into his personal bank account. When the firm’s affiliate confronted Huaman regarding the transactions, he admitted his misconduct and the firm terminated his employment. The findings also stated that Huaman failed to respond to FINRA requests for information. Huaman previously worked for Suntrust Investment Services and is not currently registered.
(FINRA Case #2012034283301)
Ronald Wayne Lankford -Tampa, Florida was suspended from association with any FINRA member firm in any principal capacity other than as a FINOP (Series 27) and Introducing BrokerDealer/FINOP (Series 28) for 18 months; suspended from association with any FINRA member firm in a principal capacity as a FINOP (Series 27) and Introducing Broker- Dealer/FINOP (Series 28) for one month; and ordered to re-qualify as a principal by passing the required examination(s) before re-associating with any member firm in that capacity.
In light of Lankford’s financial status, no monetary sanction has been imposed. Without admitting or denying the allegations, Lankford consented to the described sanctions and to the entry of findings that he was aware of and permitted the sales of unregistered promissory notes by his member firm’s representatives, failed to ensure that the notes were either registered or exempt from registration, and failed to ensure that all material facts were disclosed to investors who were offered and sold the promissory notes. The findings stated that when a preferred stock private placement offering began, Lankford, as his firm’s president and CCO, was responsible for approving the private placements and
for conducting due diligence, but failed to conduct adequate due diligence regarding the preferred stock offering to ensure that the PPM disclosed all material facts to investors.
When subsequent material events occurred, Lankford did not suspend sales of the preferred stock pending the creation and receipt of an amended PPM, and instead allowed the continued sale of the preferred stock by representatives using the original PPM without any amendment. The findings also stated that Lankford had the overall supervisory responsibility for the sales representatives and the firm’s sales activities, and allowed firm representatives to sell the preferred stock with a PPM that had material misrepresentations and omitted material facts. Lankford admitted to FINRA that although he was responsible for supervision of the firm’s OSJ principal, he did not discharge this responsibility. Lankford failed to supervise representatives selling the preferred stock to ensure all material facts were adequately and accurately disclosed to investors. The findings also included that Lankford, as the firm’s president, CCO and FINOP, allowed it to engage in a securities business while failing to maintain its minimum net capital.
FINRA found that Lankford failed to make and keep a current and accurate general ledger that showed all of the firm’s liabilities, and prepared inaccurate net capital computations for the firm. FINRA also found that Lankford was responsible for the preparation and filing of accurate FOCUS Reports on his firm’s behalf; but prepared and/or was responsible for the preparation of materially inaccurate FOCUS Reports for the firm and filed such materially inaccurate reports with FINRA. In addition, FINRA determined that Lankford was responsible for ensuring that the firm complied with the SEC’s requirements and to provide prompt notification to FINRA and the SEC when certain specified events occur, such as a net capital deficiency. Moreover, FINRA found that Lankford prepared and/or was responsible for the preparation of a materially inaccurate notification, which misrepresented the firm’s net capital on a certain date as $10,278 when it should have shown negative net capital. Lankford filed the notification containing the materially inaccurate net capital figure late with FINRA. The suspension in a principal capacity as a FINOP (Series 27) and Introducing Broker-Dealer/ FINOP (Series 28) was in effect from April 1, 2013, through April 30, 2013. The suspension in any principal capacity (other than as FINOP (Series 27) and Introducing Broker-Dealer/FINOP (Series 28) is in effect from April 1, 2013, through September 30, 2014. Lankford is currently registered with Spartan Securities. He previously worked for Sage Southeastern Securities, First Legacy Securities and Jones, Byrd & Attkisson. (FINRA Case #2010020829803)
Mark Allen Larson -Stillwater, Minnesota was barred from
association with any FINRA member in any capacity. Without admitting or denying the findings, Larson consented to the described sanction and to the entry of findings that he initiated a $17,250 withdrawal from a customer’s annuity account using an annuity withdrawal form with a forged signature. The findings stated that Larson, who was having personal financial difficulties at the time, had recently asked the customer to loan him money. The findings also stated that an affiliate of Larson’s member firm, the company that issued the customer’s annuity, mailed a check for the annuity withdrawal to the customer.
After receiving the check, the customer contacted Larson’s firm. The customer stated that he had not requested a withdrawal and advised the firm that Larson had recently
asked him for a loan. The firm contacted the company, which stopped payment on the annuity-withdrawal check, so Larson never took possession of any of the customer’s funds.
The findings also included that the firm conducted an unannounced audit of Larson’s office. The auditors found signed, blank annuity-withdrawal forms for other customers.
In some instances, the customer signatures on the blank withdrawal forms were not genuine; they were either photocopied or cut-and-pasted from other sources. Larson is not currently registered. He previously worked for Princor Financial Services, Corp. (FINRA Case #2012031582501)
Scott Lawrence Olson – Melbourne, Florida was censured, fined $10,000, suspended from association with any FINRA member in any capacity for 20 business days, and required to file with FINRA’s Advertising Regulation Department all advertisements and sales literature and to await FINRA staff approval before using, publishing or distributing any such communication for one year. Without admitting or denying the allegations, Olson consented to the described sanctions and to the entry of findings that he marketed annuities, life insurance and investment services to the public through the use of advertisements that contained misleading, unwarranted, unbalanced and promissory statements; failed to identify the products or services that Olson was using to implement his investment strategies; and failed to obtain his member firm’s pre-use approval for some of the advertisements. The findings stated that Olson was aware of notices from FINRA’s Department of Advertising Regulation, which advised him that advertisements were violative but continued to submit violative advertisements to his firms for their approval and to publicly distribute them. In order to be able to continue this pattern of misconduct, Olson failed to disclose the first notice to one of his firms. While he disclosed the existence of the second notice to the other firm, he did not provide a copy of it to that firm and falsely advised the firm that he had remedied the violative conduct in his advertisement. Olson failed to obtain pre-approval from the firms for other advertisements. The findings also stated that a firm approved Olson to engage in outside business activities through which he offered estate planning, investment advice and investment products such as annuities and life insurance. Olson publicly distributed advertisements on a website, at seminars and in newspapers. The advertisements contained numerous misleading, exaggerated or unwarranted statements. Olson either received or was advised of the first notice by his firm at or about the time that it was issued. The findings also included that Olson requested and received the second firm’s approval to continue his outside business activities, but failed to disclose the first notice to the firm when he became associated with the firm and ignored the warnings he had received as a result of the first notice. Advertising Regulation issued a second notice to Olson’s second firm describing violations very similar to the violations described in the first notice but also identified additional violations. Olson continued to submit for approval and/or publicly distribute additional violative advertisements. The advertisements violated the requirements that advertisements be fair and balanced, provide a sound basis for evaluating the products being discussed, and not omit material information. The advertisements made statements that created unrealistic expectations by using misleading, exaggerated or unwarranted language, and also used inherently misleading illustrations.
FINRA found that Olson became associated with a third firm and, again, requested and received approval to advertise and engage in outside business activities. Olson failed to disclose the first notice to the third firm and, while he disclosed the second notice, he did not provide a copy of it to that firm. Olson represented to the firm that his advertisements had been remedied to comply with the instructions in the second notice. Olson submitted for approval and publicly distributed advertisements, violating the requirements that communications to the public be fair and balanced, provide a sound basis for evaluating the products being discussed, not omit material information, and not create unrealistic expectations by using exaggerated and unwarranted language. FINRA also found that Olson was on notice that the contents were violative because such content was similar or identical to content that was the subject of the first and second notices. While registered with his second and third firm, Olson failed to obtain approval from a registered principal of his firm prior to publicly distributing advertisements.
The suspension was in effect from April 15, 2013, through May 10, 2013. Olson is currently registered with IFS Securities. He has previously worked for Merrimac Corporate Securities, World Equity Group, Inc. and Mutual Services Corporation. (FINRA Case #2008012099102)
Matthew Joseph Papa -Windermere, Florida was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Papa consented to the described sanction and to the entry of findings that he falsified and submitted non-variable insurance documents on behalf of a firm customer, by forging the customer’s signature on applications and forms without the customer’s knowledge or permission. The submission of these false documents on the customer’s behalf resulted in unauthorized transactions, which had the effect of converting the customer’s pre-existing insurance policies into new policies, which the customer never requested and refused to accept. Papa submitted these false documents on the customer’s behalf in order to obtain $2,854 in commissions for the unauthorized transactions. The findings stated that Papa falsified and submitted non-variable insurance documents on behalf of other firm customers, by forging each customer’s signature on documents without their knowledge or permission. Upon learning of the forgeries, these customers decided to keep the policies in question. The findings also stated that Papa made
misrepresentations to other firm customers, in connection with non-variable life insurance policies they purchased through Papa. Prior to the purchase of these policies, Papa falsely indicated that the customers were approved for the best policy rating available when in fact they were categorized at a less-than-optimal rating, which necessitated higher policy premium payments. The findings also included that Papa misrepresented the interest rate on a specified loan interest option within one customer’s policy by presenting the
customer with an altered version of the policy terms, which the customer never authorized. Papa made these misrepresentations in order to induce the customers to purchase these policies and obtain an additional $8,328 in commissions from the firm. Pap was formerly registered with Northwestern Mutual Investment Services, LLC. (FINRA Case #2011029189201)
Andrew Lewis Pittman – Deerfield Beach, Florida was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Pittman consented to the described sanction and to the entry of findings that he failed to provide on-the-record testimony during FINRA’s investigation regarding allegations that he improperly used an elderly customer’s funds and was appointed power of attorney for the customer. Pittman is not currently registered. He previously was employed by Sammons Securities Company, Questar Capital Corporation and Allstate Financial Services. (FINRA Case
Ricki Jay Silverman – Fort Lauderdale, Florida was fined $5,000 and suspended from association with any FINRA member in any capacity for 10 business days. Without admitting or denying the findings, Silverman consented to the described sanctions and to the entry of findings that he negligently made a statement that his primary administrative assistant interpreted as an instruction to alter the telephone records for Silverman’s customers in his member firm’s Client Account Information System (CAI System), the firm’s electronic database that contained customer information including accounts, dates of birth, addresses, telephone numbers and email addresses. The findings stated that the administrative assistant changed or deleted numerous telephone numbers to report inaccurate information, and made these changes without the affected customers’ knowledge or authorization. The unauthorized changes made to the telephone numbers affected numerous customers and were recorded on the firm’s CAI System. The assistant accessed the CAI System the next morning and reversed at least some of the alterations made the day before. The firm’s branch office management received a report that the administrative assistant had made numerous changes to customer contact information via the firm’s CAI System, and queried her about the alterations. She admitted that she made the changes, and the firm immediately suspended her employment, and she and Silverman subsequently resigned. The findings also stated that thereby, Silverman caused his firm to create and maintain inaccurate books and records in violation of Section 17(a) of the Exchange Act and Rule 17a-3 thereunder.
The suspension is in effect from May 6, 2013, through May 17, 2013. Silverman is currently registered with Morgan Stanley. (FINRA Case #2011030155302)
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