Andrew Frederick Clark, a former broker with New York, New York based MetLife Securities, Inc., submitted a Letter of Acceptance, Waiver and Consent in which he consented to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he applied for a $45,000 loan against a whole life, non-variable insurance policy, which he and immediate family members were joint owners of, without his family knowing; one of the family members was a firm customer. Mr. Clark signed the names of the family members on the loan application without their knowledge or consent. The loan was granted and the life insurance company disbursed a $45,000 check to Mr. Clark and his family members. FINRA also stated that Mr. Clark endorsed the check in his personal capacity and by signing the names of the family members without their knowledge or consent. Mr. Clark used the loan proceeds for personal purposes, which constituted the misuse of customer funds as to the family member who was a firm customer, and the misuse of non-customer funds as to the remaining family member. The findings also included that Mr. Clark repaid the loan in full with interest. Mr. Clark, of Englewood, Colorado, was fined $10,000 and suspended from association with any FINRA member in any capacity for two years. The fine must be paid either immediately upon Clark's re-association with a FINRA member firm following his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier.
Thomas Weisel Partners, LLC Fined by FINRA for Failing to Establish and Maintain Supervisory System and Procedures
The Financial Industry Regulatory Authority (FINRA) has fined San Francisco, California based Thomas Weisel Partners, LLC based on findings that the firm failed to establish and maintain a supervisory system and procedures governing principal transactions. As a result, the firm effected transactions that had the potential to, and in fact did, pose a serious conflict of interest. FINRA concluded that the principal transactions were not subject to effective supervisory review. Thomas Weisel Partners was fined a total of $200,000.
Centara Capital Securities, Inc. Censured and Fined for Misrepresenting Private Placement Fund
Centara Capital Securities, Inc., a San Diego, California based firm, submitted a Letter of Acceptance, Waiver and Consent in which the firm consented to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that it distributed various pieces of sales literature concerning a private placement fund called The EquityKey S&P/Case-Shiller Enhanced Growth Fund, which violated the content standards set forth in FINRA advertising rules. FINRA stated that each of the sales literature communications failed to balance the described benefits of a fund with the specific risks associated with the fund, including the potential loss of capital; limited liquidity, including the lack of a secondary market; the restricted redemption program; lack of initial dividends; and the small and non-diverse nature of the portfolio. FINRA also stated that each of the sales literature communications contained various false, exaggerated, unwarranted and/or misleading statements. FINRA further stated that the PowerPoint presentation and the fund snapshot included statements that constituted impermissible predictions, projections, claims, opinions and/or forecasts of future performance. Centara Capital was censured and fined $20,000.
FINRA Censures and Fines Lampost Capital, L.C. and Suspends and Fines Greg Allan Pollack for Failing to Adequately Implement Anti-Money Laundering Program
Lampost Capital, L.C., of Boca Raton, Florida, and Gregg Allan Pollack submitted a Letter of Acceptance, Waiver and Consent in which the firm and Mr. Pollack consented to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that the firm, acting through Mr. Pollack, failed to adequately implement its anti-money laundering (AML) program allowing suspicious trading activity to occur in two accounts. The firm's AML program required Mr. Pollack, its chief compliance officer (CCO), to monitor for potentially suspicious activity and AML "red flags," investigate potentially suspicious activity, and report suspicious activity by filing a suspicious activity report (SAR) form as appropriate. The customer's accounts and the trading in those accounts raised a number of red flags identified in the firm's procedures, but the firm, through Mr. Pollack, did not adequately investigate and respond to them. FINRA stated that the firm failed to ensure that an adequate independent AML test was conducted one year because the test failed to adequately assess the firm's compliance with its AML procedures. Despite the fact that numerous AML red flags associated with both accounts were apparent in the received and delivered blotter and wire order log, the tester did not note the red flags or explore whether the firm detected the red flags or conducted due diligence in response to such activity, both of which were required by the firm's procedures. Lampost Capital was censured and fined $50,000, and Mr. Pollack, of Boca Raton, FL, was fined $5,000 and suspended from association with any FINRA member in any principal capacity for two months; the suspension is in effect from February 19, 2013 through April 18, 2013.
Juan Carlos Parets Named in a FINRA Complaint for Allegedly Violating a Slew of Securities Industry Rules
Juan Carlos Parets, of New York, New York, was named in a Financial Industry Regulatory Authority (FINRA) complaint alleging that he violated his suitability obligations, made material misstatements, and omitted material facts in connection with the sale of promissory notes issued by his firm's, New York, New York based Westrock Advisors, Inc., parent company, Westrock Group, Inc., which defaulted on the payments it owed to retail investors. FINRA alleges that Mr. Parets did not have a reasonable basis for recommending the promissory notes to any customer and did not take any meaningful steps to understand Westrock Group's financial condition prior to selling the notes, such as reviewing financial statements or other financial information. Mr. Parets allegedly recommended the notes to specific customers for whom the speculative investment was unsuitable. FINRA further alleges that Mr. Parets made misstatements and omissions concerning material facts, including the actual financial condition of the Westrock Group, his lack of understanding of the financial condition of Westrock Group, and the safety of the promissory note investments. In addition, the complaint alleges that Mr. Parets failed to conduct a reasonable investigation of Westrock Group to determine whether the securities being offered were suitable for recommendation to any customer. Moreover, the complaint alleges that Mr. Parets did not have reasonable grounds to believe that his recommendations to customers were suitable on the basis of the facts the customers disclosed as to the customers' other securities holdings and financial situation and needs. Furthermore, the complaint alleges that Mr. Parets sold unregistered promissory notes, as there was no registration statement in effect under the Securities Act of 1933 when the sales occurred. The alleged sales constituted an unregistered distribution of securities and did not qualify for an exemption from registration. In connection with the alleged sales, FINRA alleges that Parets sold the notes to unaccredited investors in spite of red flags indicating that this would constitute taking part in an illegal unregistered distribution.
Jaoshiang Luo aka Rudy Luo Named in a FINRA Complaint for Allegedly Violating a Slew of Securities Industry Rules
Jaoshiang Luo aka Rudy Luo, of Flushing, New York, was named in a Financial Industry Regulatory Authority (FINRA) complaint alleging that he violated his suitability obligations, made material misstatements, and omitted material facts in connection with the sale of promissory notes issued by his firm's, New York, New York based Westrock Advisors, Inc., parent company, Westrock Group, Inc., which defaulted on the payments it owed to retail investors. FINRA alleges that Mr. Luo did not have a reasonable basis for recommending the promissory notes to any customer and did not take any meaningful steps to understand Westrock Group's financial condition prior to selling the notes, such as reviewing financial statements or other financial information. Mr. Luo allegedly recommended the notes to specific customers for whom the speculative investment was unsuitable. FINRA further alleges that Mr. Luo made misstatements and omissions concerning material facts, including the actual financial condition of the Westrock Group, his lack of understanding of the financial condition of Westrock Group, and the safety of the promissory note investments. In addition, the complaint alleges that Mr. Luo failed to conduct a reasonable investigation of Westrock Group to determine whether the securities being offered were suitable for recommendation to any customer. Moreover, the complaint alleges that Mr. Luo did not have reasonable grounds to believe that his recommendations to customers were suitable on the basis of the facts the customers disclosed as to the customers' other securities holdings and financial situation and needs.
Shawn Charles Haynes Named in a FINRA Complaint for Allegedly Violating a Slew of Securities Industry Rules
Shawn Charles Haynes, of Roosevelt, New York, was named in a Financial Industry Regulatory Authority (FINRA) complaint alleging that he violated his suitability obligations, made material misstatements, and omitted material facts in connection with the sale of promissory notes issued by his firm's, New York, New York based Westrock Advisors, Inc., parent company, Westrock Group, Inc., which defaulted on the payments it owed to retail investors. FINRA alleges that Mr. Haynes did not have a reasonable basis for recommending the promissory notes to any customer and did not take any meaningful steps to understand Westrock Group's financial condition prior to selling the notes, such as reviewing financial statements or other financial information. Mr. Haynes allegedly recommended the notes to specific customers for whom the speculative investment was unsuitable. FINRA further alleges that Mr. Haynes made misstatements and omissions concerning material facts, including the actual financial condition of the Westrock Group, his lack of understanding of the financial condition of Westrock Group, and the safety of the promissory note investments. In addition, the complaint alleges that Mr. Haynes failed to conduct a reasonable investigation of Westrock Group to determine whether the securities being offered were suitable for recommendation to any customer. Moreover, the complaint alleges that Mr. Haynes did not have reasonable grounds to believe that his recommendations to customers were suitable on the basis of the facts the customers disclosed as to the customers' other securities holdings and financial situation and needs. On top of all this, FINRA alleges that Mr. Haynes signed a customer account form he knew contained false information about a customer's investment objective and risk tolerance and caused the account form to be maintained as a record by his firm.
Mark Timothy Youngs Fined and Suspended by FINRA for Giving a Client a Fictitious Bond Redemption Confirmation
Mark Timothy Youngs, a broker formerly with New York, New York based RBC Capital Markets, LLC, submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000, suspended, and consented to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that he recommended to a brokerage customer that he sell a municipal bond and purchase a unit investment trust (UIT) comprised of certain international bonds, which was subsequently contested by the customer. FINRA said that having understood the customer to have authorized the transactions, Mr. Youngs sold the bond and purchased the UIT in the customer's account. After having received transaction confirmations, the customer approached Mr. Youngs questioning the sell transaction in his account and claiming that it had not been authorized. After this confrontation, Mr. Youngs created and provided to the customer a document that made it appear that the municipal bond had been redeemed by the issuer rather than sold. FINRA also said that when Mr. Youngs' manager questioned him about the transactions in the customer's account, Mr. Youngs immediately admitted that he had created and provided to the customer a sham redemption notice. Mr. Young, of Annapolis, Maryland, was terminated by RBC Capital Markets, and he was suspended from association with any FINRA member in any capacity for four months.
Edward Eugene Williams Barred from the Securities Industry by FINRA for Misappropriating Funds
Edward Eugene Williams, a former broker with Des Moines, Iowa based Princor Financial Services Corporation, has been sanctioned by the Financial Industry Regulatory Authority (FINRA) based on findings that Mr. Williams misappropriated a total of $2,548.83 from his adult sons' IRAs by utilizing a mutual fund's website to electronically request early distribution checks made out to the sons. When Mr. Williams received the checks, he forged his sons' signatures and endorsed most of them for deposit in his own bank account without his sons' knowledge or consent. Mr. Williams, of Loganville, Georgia, was barred from association with any FINRA member in any capacity.
Roman Jerzy Sledziejowski Barred from the Securities Industry by FINRA for Stealing Customers' Funds
Roman Jerzy Sledziejowski, a former broker with Brooklyn, New York based TWS Financial, LLC, submitted an Offer of Settlement in which he consented to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that as part of a fraudulent scheme, he converted and/or misused funds of his firm's customers and provided false account statements to some of those customers in an attempt to hide the misconduct. FINRA said that during the course of Mr. Sledziejowski's fraudulent scheme, a total of approximately $4.8 million was wired to a company that Mr. Sledziejowski owned from the bank and brokerage accounts of firm customers. FINRA also said that Mr. Sledziejowski provided some of the customers with account statements and snapshots that displayed account balances consistent with what the customers believed to be in their firm brokerage account. Based on the actual account statements provided by the firm's clearing firms, the statements Mr. Sledziejowski provided were fabrications and the values and holdings in the customers' firm brokerage accounts differed significantly from what Mr. Sledziejowski led them to believe were in their brokerage accounts. As of April 2013, Mr. Sledziejowski had only returned approximately $1.5 million of those funds to the customers. FINRA further included that Mr. Sledziejowski failed to cooperate with FINRA's investigation and failed to appear for an on-the-record interview. Mr. Sledziejowski, of Ossining, New York, was barred from association with any FINRA member in any capacity.
