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David Miller of Columbus, Ohio was named Respondent in a Financial Industry Regulatory Authority (FINRA) complaint that alleged he made negligent misrepresentations and omissions of material fact in connection with customers’ purchases of UITs. FINRA alleged that Mr. Miller recommended 140 UIT purchases totaling over $5.3 million in 129 customer accounts without having a reasonable basis to make the recommendations, in violation of FINRA Rules 2111 and 2010.

From June 2008 through August 2013, Mr. Miller was registered as a General Securities Representative (GSR) with The Huntington Investment Company (Huntington), the broker-dealer affiliate of The Huntington National Bank (Huntington Bank). The FINRA complaint originated after Huntington filed a Form U5 on August 27, 2013, disclosing that Mr. Miller had “violated industry standards of conduct.” Upon investigation, FINRA found that Mr. Miller engaged in a pattern of recommending unsuitable UITs without having a reasonable basis for the recommendations, causing his customers to lose a total of $1,019,656.83.

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Wonnie Short of Nashville, Tennessee submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly failing to ensure that a Wells Fargo Advisors LLC, (Wells Fargo) customer received the funds they were due from an annuity.

Between November 1996 and November 2011, Mr. Short was registered with Wells Fargo.  In October 2006, while Short was registered with Wells Fargo, a firm customer executed a will naming Mr. Short as executor. When the customer passed away in November 2008, Mr. Short petitioned the court and was appointed executor of the client’s estate. As executor, Mr. Short facilitated the pay out on three of the client’s annuities. For one of the annuities, the client’s estate was a 10% beneficiary and a local foundation, which was also a Wells Fargo customer, was a 90% beneficiary.

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Ali Radfar of New York, New York submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly participating in an undisclosed private securities transaction in violation of NASD Rule 3040 and FINRA Rule 2010. Radfar entered the securities industry in July 2006 and was associates with FINRA member firm UBS Securities, LLC (UBS) from August 2012 through March 2015.

From August through October 2014, Mr. Radfar, with the help of another UBS member, participated in an undisclosed private securities transaction. FINRA alleged Mr. Radfar and the other firm member pooled personal funds with those of 12 other individuals whose investment they solicited. FINRA found a collective total of $300,000 was invested in SMS, an application-based game company. This investment, a private securities transaction, was made through two outside investment vehicles that were also formed by Mr. Radfar and the UBS representative.

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James Scullin of Miami, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly placing an unauthorized trade in a customer’s account in violation of FINRA Rule 2010. Mr. Scullin was a general securities representative for FINRA member firm UBS Financial Services (UBS) from June 2011 through November 2014.

FINRA Rule 2010 reads that “a member, in the conduct of his business, shall observe high standards of commercial honor and just and equitable principles of trade.” In mid-2011, Mr. Scullin became a registered representative at UBS for the account of a firm customer. FINRA investigators found that on or about September 12, 2014, Mr. Scullin placed a $5,000,000 trade without informing the two individuals with authority to place trades in the customer account or seeking their authorization. Mr. Scullin did not have discretionary authority for any of the customer’s accounts.

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Michael DeBoer of Trinity, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly not disclosing his participation in a transaction that recommended customers make an unsuitable securities transaction. Mr. DeBoer was registered with former FINRA member firm Dalton Strategic Advisors Investment Services Inc. (Dalton Strategic) from November 2009 to April 2013.

In June 2010, while registered with Dalton Strategic, Mr. DeBoer recommended that two customers invest a total of $200,000 in securities offered by a software development company. Mr. DeBoer received $32,000 in commissions for the securities transaction. However, the investors ultimately lost the entirety of their investments in the securities. FINRA alleged the securities were not offered through Dalton Strategic, and Mr. DeBoer did not disclose his participation in the transactions to his associated firm. FINRA further alleged that before making his recommendation, Mr. DeBoer also failed to reasonably investigate the software company or its securities and therefore lacked a reasonable basis to believe the securities were suitable investments for his clients.

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Lance Ziesemer of Waconia, Minnesota submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement for the Financial Industry Regulatory Authority (FINRA) for allegedly implementing a trading strategy and making unsuitable recommendations to two customers in connection with Unit Investment Trusts (UITs). From May 2007 until February 3, 2016, Mr. Ziesemer was registered with Feltl & Company (Feltl) as a General Securities Representative (GSR) and General Securities Sales Supervisor.

During his association with Feltl, Mr, Ziesemer recommended that a number of his customers buy and sell UITs. Between January 2011 and December 2012, Mr. Ziesemer recommended that two customers repeatedly sell UITs that they had held for a short time only to repurchase different UITs. The customers following Mr. Ziesemers recommendations made 36 short-term UIT switches.

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Gregory Barr., a Boca Raton, Florida based broker formerly employed with Deutsche Bank Securities, Inc. (Deutsche Bank) and Raymond James & Associates, Inc. (Raymond James), 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) findings that he entered discretionary trades in the accounts of four customers without the necessary prior written customer authorization.

FINRA found that while employed as a General Securities Representative with Deutsche Bank, Gregory Edward Barr exercised discretion in four of his customers’ accounts.  He placed sell orders for the customers in the same stock.  Although these customers had allegedly given Mr. Barr verbal authorization to sell their positions if the stock decreased in price, he allegedly failed to discuss the transactions with his customers on the day of the sell orders.  FINRA further alleged Deutsche Bank had not approved the customers’ accounts for discretionary trading.  Therefore, none of the accounts had been approved for the discretionary trades made by Mr. Barr.  Continue reading →

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Feltl & Company (Feltl) of Minneapolis, Minnesota submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement for the Financial Industry Regulatory Authority (FINRA) for allegedly failing to apply sales-charge discounts to certain customers’ eligible purchases of unit investment trusts (UITs) and for failing to establish, maintain, and enforce a proper supervisory system. Feltl has been registered with FINRA and the NASD since 1975 and has faced three similar FINRA disciplinary actions in the past.

UITs are generally issued by a firm representative that assembles the UIT’s portfolio of securities, deposits the securities in a trust, and sells units of the UIT in a public offering. UIT units are redeemable securities that are issued for a specific term, and entitle an investor to receive his or her proportionate share of the UIT’s net assets on redemption or at termination.

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Oriental Financial Services Corp. (OFS) of San Juan, Puerto Rico submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Market Regulation of the Financial Industry Regulatory Authority (FINRA) for allegedly purchasing municipal securities for its own account from customers and then selling those municipal securities to other customers at prices that were not fair or reasonable.

Between July 1, 2013 and September 30, 2013 FINRA investigators found multiple transactions in which OFS was not fair or reasonable to its customers. FINRA alleged OFS failed to take into consideration all relevant factors, including the best judgment of the broker as to the fair market value of the securities at the time of the transaction and of any securities traded in connection with the transaction. Additionally, FINRA alleged that OFS didn’t account for the expense involved in effecting the transaction, the fact that the broker is entitled to a profit, and the total dollar amount of the transaction.

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TradeSpot Markets Inc. (TradeSpot) and its President, Chief Operating Officer and owner Mark Beloyan of Davie, Florida were named as Respondents in a Financial Industry Regulatory Authority (FINRA) complaint that alleges the firm, acting through its representatives, engaged in penny stock transactions without complying with Section 15(h) and Rule 15g-9 of the Securities Exchange Act of 1934 and FINRA conduct rules.

Section 15(h) of the Exchange Act prohibits brokers and dealers from “using the mails or any means or instrumentality of interstate commerce to effect any transaction in penny stock by any customer except in accordance with the requirements of Section 15(h) and the rules and regulations prescribed thereunder.” Rule 15g-9 of the Exchange Act makes it “unlawful for a broker or dealer to sell a penny stock to, or to effect the purchase of a penny stock by, any person unless, prior to the transaction, the broker or dealer has approved the person’s account for transactions in penny stocks and has received from the person an agreement to the transaction.”

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