Ane S. Plate, a former registered representative with Orlando, Florida based Wells Fargo Advisors Financial Network, LLC (Wells Fargo), consented to, but did not admit to or deny, the sanction and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that she effected 15 unauthorized trades from a customer’s Wells Fargo account, and converted the proceeds of those unauthorized trades for her personal use and benefit. Continue reading →
The Financial Industry Regulatory Authority (FINRA) has fined Merrill Lynch $6 million for Regulation SHO (Reg SHO) violations and failures to supervise. According to FINRA’s announcement on October 27, 2014, it censured and fined Merrill Lynch Professional Clearing Corp. (Merrill Lynch PRO) $3.5 million for violating Reg SHO, which is an SEC rule governing short sales and aimed at preventing abusive naked short selling. Additionally, FINRA also censured and fined Merrill Lynch, Pierce, Fenner & Smith Inc. (Merrill Lynch) $2.5 million for inadequate supervisory practices.
According to FINRA, from September 2008 through July 2012, Merrill Lynch PRO failed to take action to close out certain fail-to-deliver positions, as required under Reg SHO. Further, Merrill Lynch PRO did not have appropriate systems and procedures in place to address the Reg SHO close-out requirements during most of the time period. Continue reading →
Former PFS Investments Inc. (PFS) broker Darwin Hayle has been banned from the financial industry and fined $42,500 for allegedly misappropriating investor funds. Darwin Hayle, of Boca Raton, Florida, allegedly sold promissory notes to his clients, claiming the notes were backed by the U.S. Small Business Administration (SBA), according to the Florida Office of Financial Regulation (FL-OFR) complaint. However, Darwin Hayle allegedly showed the investors false documents which included a forged signature of an SBA representative. The FL-OFR never approved those promissory notes as legal securities and they were never guaranteed by the SBA. Continue reading →
Jose Lozano, a broker formerly employed with Miami, Florida-based ITAU International Securities, Inc. (ITAU International), 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 affixed customer signatures to wire transfer instructions to facilitate the transfer of funds for the purchase of property.
According to FINRA, Jose Lozano, of Miami, Florida, had two of the three customers who jointly held ITAU International accounts sign a Letter of Authorization (LOA) that included wire instructions which authorized the transfer of $150,000 from a third-party broker-dealer to the seller of the property. The third-party broker-dealer declined the transfer, however, due to the transfer being sent to a third-party recipient. Continue reading →
Richard Happle, a former registered representative with Tampa, Florida-based 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 failed to execute a customer trade order, thereby allegedly causing his customer to suffer approximately $28,000 in losses.
According to FINRA, Richard Happle, of St. Petersburg, Florida, was instructed by his customer to sell all shares of a certain stock held in his account at the market open the following day. The next day, Richard Happle allegedly decided not to sell the customer’s stock shares due to the fact that the stock price was falling rapidly and he wanted to talk over the decision to sell with his customer. The customer, however, lived in Alaska and Richard Happle delayed contacting him by a few hours due to the time zone difference. Continue reading →
Arhonda T’Lene Guinn, a former registered representative with Vero Beach, Florida-based Stifel, Nicolaus & Company, Inc. (Stifel Nicolaus) submitted a Letter of Acceptance, Waiver and Consent in which she consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that she converted funds from a customer’s account for personal use.
According to FINRA, Arhonda Guinn transferred $12,100 from a customer’s account to a bank account belonging to her landlord. The Stifel Nicolaus customer had no knowledge of and did not consent to the transfer of funds. In order to complete the transfer, Arhonda Guinn allegedly falsified her customer’s previously signed Letter of Authorization. FINRA found that Arhonda Guinn used the customer’s funds to pay six months of rent. Consequently, Arhonda Guinn, of Vero Beach, Florida, was barred from association with any FINRA member in any capacity. Continue reading →
Karl Robert Herrmann, a former registered representative with Smithfield, Rhode Island-based Fidelity Investments Institutional Services Company, Inc. (Fidelity) submitted an Offer of Settlement in which he consented to, but did not admit to or deny, the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he converted his member firm’s funds for his personal use. According to FINRA, Karl Herrmann, of Tampa, Florida, identified corporate credit card transactions as business expenses, which caused Fidelity to pay the credit card company for the transactions. However, according to FINRA, Karl Herrmann allegedly falsified his expense reports, claiming that the expenses were business-related when they were personal expenses. Continue reading →
The Financial Industry Regulatory Authority (FINRA) has fined and suspended Karen Lee Chafe, a former Berthel, Fisher & Co. Financial Services, Inc. (Berthel Fisher) registered representative in its Melbourne Beach, Florida offices, for admitting to altering customers’ variable annuity withdrawal forms and IRA distribution/withdrawal request forms. According to FINRA, Karen Chafe, a/k/a Karen Lee Linscott, modified and resubmitted withdrawal request forms at least 61 times on behalf of 14 customers.
According to FINRA’s Default Judgment, Karen Chafe reused old customer forms, whited out or obscured existing information, added new information, and then submitted the altered forms as originals to Berthel Fisher over a period of six years. Although Karen Chafe was authorized to make the withdrawals and distributions, she did not have the customers’ authorization to submit altered forms. Karen Chafe has been assessed a deferred fine of $5,000.00 and suspended from associating with any FINRA member in any capacity for a year. The suspension is in effect from June 16, 2014 through June 15, 2015. Continue reading →
Lake Worth, Florida-based company Vertical Integration Group, LLC, along with its Managing Members Richard V. Morello, also of Lake Worth, and Boynton Beach, Florida-based Junior Alexis have been ordered by a Federal Court to pay monetary sanctions for their part in illegal, off-exchange precious metals transactions.
According to the Order of Default Judgment by the U.S. District Court for the Southern District of Florida, Vertical Integration Group, by and through Richard Morello and Junior Alexis, solicited investors to engage in off-exchange leveraged, margined, or financed precious metals transactions, executed through Hunter Wise Commodities LLC. The precious metals included gold, silver, platinum and palladium. The Order states that approximately 39 customers of Vertical Integration Group invested over $1 million and ended up losing $893,859 of their monies to trading losses, commissions, fees and other charges. The Order further states that Vertical Integration Group received commissions and fees totaling $554,566 for these precious metals transactions.
The U.S. Commodity Futures Trading Commission (CFTC) has charged Jean Chauvel (Chauvel), Renaud Pierre-Charles (Pierre-Charles), Robert Tripode (Tripode) and their Miami, Florida-based company, Forex Monthly Income Fund, LLC (FMIF), with forex pool fraud, alleging that they misappropriated over $1 million of investors’ funds.