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Robert Stein, a registered representative with the Boston, MA branch of Capitol Securities Management, Inc. (Capitol Securities), submitted a letter of Acceptance, Waiver, and Consent in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) sanction and findings that he made unsuitable reverse convertible note (RCN) recommendations and purchases in the accounts of eight customers.

FINRA found that Robert Gerald Stein, of Sudbury, MA, recommended and effected 24 purchases of RCNs in 8 customer accounts.  The customers were primarily over 60 years old and had conservative investment objectives.  According to FINRA, Mr. Stein’s recommendations and purchases totaled approximately $4 million in the 8 customers’ accounts.  Moreover, all of the accounts were heavily concentrated in RCNs, constituting a substantial portion of their net worth. Continue reading →

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Matthew Maberry, a Registered Principal with the Alton, Illinois branch of Alton Securities Group, Inc. (Alton Securities) submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was fined and suspended by the Financial Industry Regulatory Authority (FINRA) for failing to adequately supervise the exchange-traded fund (ETF) and mutual fund recommendations and sales by registered representatives under his supervision.

Matthew Dale Maberry, of Bethalto, Illinois, was the Chief Executive Officer and Chief Compliance Officer with Alton Securities and was responsible for the design and implementation of the firm’s supervisory system.  FINRA found that Mr. Maberry failed to ensure that this supervisory system was implemented to supervise the sales activity of its registered representatives.  Specifically, FINRA stated that the supervisory system was not reasonably designed to ensure that employees made suitable recommendations of complex investment products such as non-traditional ETFs and non-traditional mutual funds. Continue reading →

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Stuart Horowitz, a former registered representative with the Coral Springs, Florida branch of Securities America, Inc., submitted a letter of Acceptance, Waiver, and Consent in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) sanction and findings that he made unsuitable recommendations and trades in CSMIF preferred notes of an unregistered limited partnership investment fund despite numerous red flags that the fund was not a viable investment.

FINRA found that Stuart Horowitz requested that his member firm, Securities America, quickly approve the CSMIF preferred notes fund so he could begin selling them.  While awaiting a third-party due diligence report, the firm agreed to allow Mr. Horowitz to offer the CSMIF preferred notes for sale to existing fund investors.  Mr. Horowitz emailed his customers with an interest in the fund and recommended they move forward with an investment conversion.  FINRA noted that recommendations were made despite the fact that Mr. Horowitz was aware of numerous red flags, including that his previous member firm had decided not to allow the sale of the CSMIF preferred notes due to concerns about the fund’s ability to generate income for investors. Continue reading →

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Byron A. Echeverria, a General Securities Representative formerly employed with the Houston, Texas branch of Morgan Stanley, submitted a Letter of Acceptance, Waiver, and Consent in which he consented to, but did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he falsified customer account documents without the customers’ knowledge.

FINRA’s findings state that Byron A. Echeverria, of Katy, Texas, falsified ten documents related to ten customer accounts. Some of the falsified documents included disclosure forms, transfer forms and IRA distribution forms. Mr. Echeverria allegedly re-used original customer signatures from previously executed documents, recycled customers’ signed signature pages from expired forms, affixed customer initials to handwritten changes, and altered tax withholding amounts in order to expedite transactions. None of the customers were aware of the altered forms or that their signatures had been affixed by Mr. Echeverria. Continue reading →

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Valentino Infante, a former General Securities Registered Representative with the Miami, Florida office of Wells Fargo Advisors, LLC (Wells Fargo), has been permanently barred from acting as a broker or otherwise associating with firms that sell securities to the public by the Financial Industry Regulatory Authority (FINRA) due to findings that he engaged in outside business activities without providing his member firm with prior written notice and for failing to appear at a FINRA on-the-record interview.

According to FINRA, Valentino Infante, of Miami, Florida, established a limited liability company in Florida and, on two occasions, solicited a Wells Fargo customer to provide funding for the business. Mr. Infante neglected to obtain his member firm’s approval to engage in the outside business activities, as required by FINRA Rule 3270. Continue reading →

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Richard A. McGuire, of Bay Shore, New York, has been permanently barred from acting as a broker or otherwise associating with firms that sell securities to the public for allegedly taking $95,000 from a customer under false pretenses and refusing to give the money back when the customer requested it.

The National Adjudicatory Council (NAC) of the Financial Industry Regulatory Authority (FINRA) affirmed the findings and sanctions imposed by the Office of Hearing Officers (OHO) which found that Richard McGuire converted $95,000 of a former customer’s money by using the money for his personal use and forged her signature on two loan agreements. FINRA’s Department of Enforcement had found that Mr. McGuire was allegedly given the money to invest in an annuity-like product and neither loaned him the money nor signed any loan documents. Continue reading →

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Sheldon Harber, a former registered representative with the St. Louis, Missouri branch of Cambridge Investment Research, Inc. (Cambridge), submitted a letter of Acceptance, Waiver and Consent (AWC) in which he was fined and suspended by the Financial Industry Regulatory Authority (FINRA) for allegedly engaging in private securities transactions without the approval of his member firm.

Without admitting or denying FINRA’s findings, Sheldon Jay Harber, of Chesterfield, Missouri, consented to the sanctions and to the findings that he participated in private securities transactions by investing and facilitating investments for other investors in a private company and failed to provide Cambridge with the required written notice. Mr. Harber and the other investors invested $435,000 in the private company. Continue reading →

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Carlos Benavidez Jr., a former registered representative with the Louisville, Kentucky branch of Waddell & Reed, consented to, but did not admit to or deny, the sanction and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he exercised discretion in 80 customer accounts without the necessary prior written authorization from the customers or his member firm.

According to FINRA, Carlos Benavidez Jr., of Louisville, Kentucky, exercised discretion in effecting hundreds of securities transactions in approximately 80 customer accounts. Further, FINRA found that Mr. Benavidez participated in the backdating of 26 customer notes in order to falsely reflect the date of the conversations with the customers. Mr. Benavidez did not have the written authorization from his customers to exercise discretion, nor had he received written approval from Waddell & Reed for discretionary trading in these accounts. Continue reading →

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Marco Daniel, a registered representative with the Chula Vista, California branch of PFS Investments, consented to, but did not admit to or deny, the sanction and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he borrowed money from a customer, failed to disclose his outside business activity, and falsely reported in a firm questionnaire his involvement in this misconduct.

According to FINRA, Marco Antonio Daniel (aka Tony Daniel), of Chula Vista, California, borrowed a total of $19,015 from a customer and did not repay the loans until the customer had complained to the firm. Mr. Daniel also failed to disclose the loans or to receive the firm’s approval. Further, he failed to provide notice to his firm that he had engaged in outside business activity involving the use of the borrowed money. Continue reading →

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Carl Busch, a Registered Principal with the Dallas, Texas based WFG Investments, Inc. (WFG) submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was fined and suspended by the Financial Industry Regulatory Authority (FINRA) for failing to adequately supervise the unsuitable IRA recommendations and transactions of a registered representative under his supervision.

According to FINRA, Carl Wayne Busch, of Oklahoma City, Oklahoma, failed to adequately supervise or properly investigate numerous red flags in connection with a registered representative of his member firm who recommended and engaged in unsuitable trades in the Individual Retirement Account (IRA) of a retiree with known health problems, limited income, and a “moderate” risk tolerance. Continue reading →