Timothy Burke Ruggiero, a former Plantation, Florida-based registered principal employed by Lazarus Asset Management, LLC and Evora Capital, Inc., also from Plantation, Florida, has been permanently barred by the Financial Industry Regulatory Authority (FINRA). As we first reported back in December, 2012, FINRA had filed a complaint against the former Fort Lauderdale-based Brookshire Securities Corporation registered principal based on findings that Mr. Ruggiero intentionally manipulated stock prices, which violates Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. FINRAs findings further found that Mr. Ruggiero engaged in unlawful trades and forgery on order paperwork to show that there was supervisory review when, if fact, there was not. FINRA also found that Mr. Ruggiero, as the firm's President and CEO, failed to supervise the trading and electronic communications of the firm, which resulted in illegal trading in violation of Regulation M. As a result of his unlawful conduct, Timothy Ruggiero was barred from association with any FINRA member in any capacity.
Jack Richard Kelly, a former Millington, Tennessee-based registered principal employed by Duluth, Georgia-based PFS Investments Inc. submitted a Letter of Acceptance, Waiver and Consent 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 a total of $85,000 from customers. FINRA's findings stated that a customer gave Mr. Kelly checks totaling $40,000 to be invested in a fund that Mr. Kelly had represented would provide 7% interest. The $40,000 in funds had been liquidated from a trust account held at Mr. Kelly's firm that was intended to provide for the customer's disabled sister. Rather than investing the $40,000 in the purported high-yield investment, Mr. Kelly converted the funds to his personal use. FINRA's findings also stated that an elderly customer gave Mr. Kelly a total of $45,000 to be invested in the 7 percent investment, but Mr. Kelly again converted the funds to his personal use. As a result of his conduct, Mr. Kelly was barred from association with any FINRA member in any capacity.
Irvine, California-based Accelerated Capital Group, Inc. submitted a Letter of Acceptance, Waiver and Consent in which the firm consented to, but did not admit to or deny, the described sanctions and to the entry of the Financial Industry Regulatory Authority's (FINRA) findings that its website contained misleading information and that it violated escrow account rules and procedures. The firm's website contained fabricated testimonials and a world map that incorrectly suggested the firm had global offices and wanted to add 250 financial advisers. However, the firm had only two offices and omitted to state that its membership agreement limited the firm to 20 associated persons. FINRA's findings also stated that two of the firm's representatives maintained business-related websites that contained false, misleading, exaggerated, and promissory statements. The firm's representatives distributed power point slides to investors that were unbalanced, failed to present a sound basis for evaluating the offered investment, and violated the prohibitions against exaggerated performance predictions and unwarranted performance claims and forecasts.
FINRA's findings also included that the firm failed to have any system or procedures applicable to the review and approval of websites, including procedures that addressed whether they would be permitted, who would be responsible for their review and approval, and how that approval would be documented.
The Law Offices of Robert Wayne Pearce, P.A. filed a claim against Santander Securities LLC (Santander). A summary of the allegations the Claimants made against the Puerto Rico based brokerage is below.
This arbitration arises out of a Santander stockbroker's recommendation that a retired couple invest their life savings, $500,000 in Westernbank preferred stock. The clients had never made any stock market investments before they met the Santander stockbroker and the Westernbank preferred stock was the only investment in their accounts.
The clients first met the Santander stockbroker when he cold-walked into the clients' family owned sporting goods store. The clients were in their 70's and on the verge of retirement after running their small business for over 30 years.
The Law Offices of Robert Wayne Pearce, P.A. filed yet another claim against UBS Financial Services Incorporated of Puerto Rico (UBS Puerto Rico). A summary of the allegations the Claimant made against the Puerto Rico based brokerage is below. The client is over 62 years old and is unmarried and lives alone in San Juan, Puerto Rico. She is a Clinical Psychologist, earning a modest income. The client is also dependent upon income earned on an inheritance from her parents that was deposited in her UBS Puerto Rico brokerage accounts. Two individuals served as her UBS Puerto Rico stockbrokers during the period of relevance.
In 2002 and 2003, the client inherited what she understood to be bonds and mutual funds from her parents' UBS PaineWebber accounts when they passed away. The client did not know the true nature or risk of the investments that she had inherited and held in her account. She thought she actually owned bonds that would always pay interest until they matured. Neither UBS Puerto Rico nor her UBS Puerto Rico Stockbrokers ever gave her a full explanation of what type of investments she really owned, which were closed-end funds and that what she actually owned was shares of the closed-end funds (like common stock shares) that only paid dividends at the manager's discretion. She also didn't know that these were leveraged, illiquid investments which were very risky.
 In 2008 and 2009, Client loaned money to a friend. During the period 2009 through 2011, Client was unemployed. The UBS Puerto Rico stockbroker persuaded her to withdraw funds from a collateralized loan account with a UBS Puerto Rico affiliate rather than to sell investments in her account to generate the money to loan her friend and support herself.
Robert Wayne Pearce, P.A. filed another arbitration claim against UBS Financial Services Incorporated of Puerto Rico (UBS Puerto Rico). A summary of the client's allegations against UBS Puerto Rico is below. The Claimant is 73 years old and living alone in San Juan, Puerto Rico. He retired from the Veterans Administration pharmacy department. After retiring from the V.A., he went back to work part-time as a Pharmacist to supplement his income. Currently, he supports himself with his V.A. pension, part-time employment income and dividends from his securities account at UBS Puerto Rico.
The UBS Puerto Rico stockbroker has been the client's primary broker for many years and knows the client's age, employment status, and financial condition. The stockbroker knew that the client's life savings were deposited with UBS Puerto Rico and in his hands. The client has been a passive investor and relied exclusively on his stockbroker to make all of the investment decisions in his UBS Puerto Rico account. As a result of the UBS Puerto Rico stockbroker's recommendations and decisions, the client's account became highly concentrated (100%!) in Puerto Rico bonds.
Joshua Daniel Mosshart, a former Malibu, California-based registered principal employed by Boston, Massachusetts-based LPL Financial LLC, submitted a Letter of Acceptance, Waiver and Consent 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 earned commissions for referring investors to Enviro Board Corporation (Enviro) without his firm's approval. Mr. Mosshart sought his firm's permission to be a "sales representative" for Enviro, a company involved in selling manufacturing machines for building panels. However, Mr. Mosshart referred about 20 investors, some of whom were the firm's customers, to the company. The investors invested nearly $5 million in the company, and Mr. Mosshart received roughly $485,000 in referral fees. FINRA's findings stated that although the firm approved this outside business activity, it specifically advised Mr. Mosshart that he was not to solicit any individuals to invest in the company and required him to inform the firm about any material changes to his role with the company. Mr. Mosshart never provided prompt and accurate written notice to the firm that he was: 1) referring investors to the company, 2) receiving fees for those referrals, 3) and serving as the company's president. Mr. Mosshart was barred from association with any FINRA member in any capacity as a result of his failure to receive his firm's written approval to engage in those private securities transactions.
Marylin T. Myers, a former Bayview, Texas-based registered principal employed by Lincoln, Nebraska-based Allstate Financial Services, LLC, 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 participated in the sale of a privately held company's promissory notes to investors without notifying her firm or obtaining the firm's written approval. FINRA's findings stated that Ms. Myers recommended that investors, who were not the firm's customers, invest in On The Edge Marketing LLC notes. Ms. Myers helped facilitate their purchases and invested $16,000 of her own money in the notes. Collectively, the investors and Ms. Myers invested more than $1,000,000 in the notes. To date, On The Edge Marketing has failed to repay the principal and interest due to the investors and Ms. Myers. FINRA's findings also stated that on the firm's annual compliance questionnaires, Ms. Myers inaccurately stated that she had not engaged in any private securities transactions and inaccurately stated that she had not engaged in soliciting, referring, or recommending any private placements or private securities products.
Allen Wayne St. Amour, a former Traverse City, Michigan-based registered representative employed by Springfield, Massachusetts-based MML Investors Services, LLC and New York, New York-based NYLIFE Securities LLC, was fined and suspended based on the Financial Industry Regulatory Authority's (FINRA) findings that he sold equity indexed annuities to his member firm's customers without giving prior written notice to the firm. Mr. St. Amour allegedly received a total of $114,030 in compensation for the sales. FINRA's findings also stated that Mr. St. Amour signed a customer's name on documents related to the purchase of variable annuities in contravention of his firm's rules and without receiving the customer's written authorization to sign the customer's name. Mr. St. Amour allegedly submitted the documents to his firm without informing anyone that he had signed the customer's name. FINRA's findings further stated that Mr. St. Amour failed to amend his Form U4 to disclose a fine the Indiana Commissioner of Insurance had imposed.
Mr. St. Amour was fined a total of $22,500, suspended from association with any FINRA member in any capacity for a total of six months, and ordered to disgorge $114,030 in commissions. The fines and disgorgement are due and payable if he reenters the securities industry. His suspension is in effect from January 20, 2014, through July 20, 2014.
Bruce Francis Supanik, a former Miami, Florida-based registered representative employed by Cincinnati, Ohio-based The O.N. Equity Sales Company, submitted a Letter of Acceptance, Waiver and Consent 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 failed to provide documents and information FINRA had requested and failed to appear and provide on-the-record testimony in relation to the events surrounding his member firm's termination of his employment for allegations that he transferred the balance of a customer's account. The balance was allegedly transferred to the joint checking account he shared with the customer and totaled $506,450.32. According to FINRA, Mr. Supanik then withdrew the balance from the joint checking account and deposited it into his personal bank account. FINRA stated that in view of Mr. Supanik's failure to comply with FINRA's requests for documents, information, and testimony, he hindered FINRA's ability to fully investigate the matters at issue in this investigation. Mr. Supanik was barred from association with any FINRA member in any capacity.