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Murry Meir Shapero of Aventura, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for violating NASD Rule 2510(b) and FINRA Rule 2010.

NASD Rule 2510(b) prohibits registered representatives from exercising discretion in a customer’s account unless the customer gives prior written authorization to the registered representative and the registered representative’s member firm provides written acceptance of the account as discretionary.’ FINRA Rule 2010 requires that member firms and registered representatives “observe high standards of commercial honor and just and equitable principles of trade.” A violation of NASD Rule 2510(b) is also a violation of FINRA Rule 2010. Continue Reading

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Stefan Pastor, a former registered representative with Raymond James Financial Services, Inc. (Raymond James) has been permanently barred by the Financial Industry Regulatory Authority (FINRA) based upon its findings that he gave false information to FINRA during on-the-record (OTR) testimony regarding allegations that he engaged in unauthorized trading.

According to FINRA, Stefan Anton Pastor, of Fort Lauderdale, Florida, provided false information in his OTR testimony to FINRA during an investigation into a customer complaint alleging unauthorized trading.  Mr. Pastor falsely claimed that the customer had authorized the trades, and to support his claim, he allegedly provided the customer with sale confirmations, which the firm determined were not authentic. FINRA found that the customer never authorized the trades and that Mr. Pastor did, in fact, provide false trade confirmations to try to prove that he had reversed the unauthorized trades. Continue Reading

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Halil Kozi, a former registered representative with PHX Financial, Inc., was named a Respondent in a Financial Industry Regulatory Authority (FINRA) complaint for allegedly engaging in excessive trading, known as churning, in his customer’s account, causing his customer to suffer losses of nearly $72,000.

FINRA’s complaint alleges that Halil Kozi, of Middletown, New Jersey, allegedly exercised complete control over the trading in his customer’s account.  Mr. Halil engaged in trading of equities and options, of which he is alleged to have known his customer lacked experience and knowledge.  The complaint alleges that Mr. Halil used high-pressure sales tactics on his customer, and the customer routinely followed his recommendations.  FINRA further alleges that the recommendations were unsuitable for his customer in light of the customer’s moderate risk tolerance and balanced growth investment objective. Continue Reading

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David Manor, a currently unregistered representative formerly employed with Wells Fargo Clearing Services, LLC (Wells Fargo), has agreed to an Offer of Settlement by the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) in which he consented to, but did not admit to or deny, the findings that he engaged in outside business activities without his firm’s approval, made unsuitable recommendations to his customer and caused that customer approximately $224,000 in losses in less than three months.

FINRA’s findings state that while employed by Wells Fargo, David Manor, of Brookline, Massachusetts, engaged in unapproved outside business activity in which he assisted a customer, a 75 year old retiree with limited income, in selling mineral rights on a property he owned.  In return for his help, the customer paid Mr. Manor $107,000 that Manor then used to open a brokerage account away from his member firm and traded from the account on behalf of his customer.  FINRA stated that Mr. Manor effected risky, unsuitable options trades from the account, and caused his customer to lose approximately $224,000 in less than three months. Continue Reading

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In an arbitration proceeding against UBS Financial Services, Inc. and UBS Financial Services, Inc. of Puerto Rico, the Law Offices of Robert Wayne Pearce, P.A. won $4.25 million in compensatory damages plus interest at 6.25% from February 28, 2014 and costs of $170,000 for one of the firm’s clients last month.

This arbitration arose out of a series of unsuitable recommendations by a UBS-PR and UBS financial advisor that our clients purchase and then hold an excessive concentration of Puerto Rico Bonds and UBS-PR Closed-End Funds.  As a result, our clients’ investment portfolios were not diversified from not only an asset allocation standpoint but also overly concentrated in securities from a single geographic area – Puerto Rico.  The excessive concentration in Puerto Rico securities and leverage strategy implemented made the accounts highly speculative, which was inconsistent with not only our clients’ investment objectives but also the UBS-PR and UBS financial advisor’s representations.  UBS and UBS-PR, through their representatives, disseminated false and misleading information to our clients about the nature, mechanics and risks of owning leveraged and concentrated positions in Puerto Rico Bonds and UBS-PR Closed-End Funds and the investment strategy employed in their accounts. Continue Reading

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On November 1, 2018, an OHO (Office of Hearing Officers) decision became final and James Randall Clay has been barred for allegedly engaging in private securities transactions and misrepresenting facts to his member firm and FINRA in violation of FINRA Rules 3270 and 2010.

James Randall Clay was employed with U.S Bancorp from August 2012 until December 2013 when his firm filed a Uniform Termination Notice of Securities Registration (“Form U5”) for violating the firm’s Code of Ethics. FINRA stated that Clay engaged in private securities transactions without written notice or approval from his member firm. On December 7, 2013, while associated with U.S. Bancorp, he started a company under the name “Clay Enterprises, LLC” which he intended to use to manage rental properties. According to FINRA, Clay purchased real estate from an elderly customer from his member firm under terms that only benefited himself. Clay allegedly drafted and signed an agreement to purchase the customers property for $1 million, with the customer financing the amount and borrowed an additional $500,000 to fund the down payment on the property. In addition, Clay established a limited liability company to manage the rental and began collecting rent. The findings stated that Clay never provided notice to his member firm and when the customer’s family complained, he claimed he was not the purchaser and only helped his sister purchase the property. Continue Reading

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Michael Jason Gamez of Corsicana, Texas submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he has been fined and suspended for allegedly engaging in unauthorized trading and unsuitable recommendations in violation of NASD Conduct Rules 2510(b) and FINRA Rules 2111 and 2010.

From October 29, 2007 to December 15, 2014, Michael Jason Gamez was registered with Edward Jones as a General Securities Representative. According to the FINRA findings, Gamez exercised discretion in 15 customer accounts without obtaining prior written authorization from the customers. Gamez also allegedly executed 4,448 unsuitable trades in 74 customer accounts. FINRA stated that Gamez did not discuss with the customers the shares he intended to purchase, the amount of funds available in the account. Further, he did not consider how the deposited funds limited the transaction size in a given month. In addition, Gamez did not inform the customers on the actual trade date and only notified them after he purchased the securities. FINRA concluded Gamez did not understand the potential risks and rewards associated with the recommended trades and lacked a reasonable basis for his recommendations. Continue Reading

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Noel Carino of Blue Springs, Missouri submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he has been barred for allegedly refusing to provide documents and information requested violating FINRA Rules 8210 and 2010.

From August 2006 until October 2017, Carino was registered with General Securities Corp. as a General Securities Representative. According to FINRA, Carino violated FINRA Rules 8210 and 2010 by failing to provide documents and information requested. FINRA stated that Carino refused to provide information during a FINRA investigation into whether he engaged in outside business activities without written notice to his firm, whether he engaged in private securities transactions, and whether he reported all outside brokerage accounts in which he had an interest in the firm. FINRA further stated that they sent out two letters on separate dates to acquire the information requested and Carino allegedly failed to comply both times. Continue Reading

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Frank Roland Dietrich of Fairfax Station, Virginia submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) and agreed to be barred for allegedly engaging in private securities transactions in violation of NASD Rule 3040 and FINRA Rules 3280 and 2010.

Frank Roland Dietrich was registered with Quest Capital Securities as a General Securities Representative from March 2013 through April 2019. According to FINRA, Dietrich engaged in private securities transactions totaling more than $10.8 million without written notice or approval from his firm. The FINRA findings stated Dietrich solicited investors to purchase promissory notes relating to the Woodbridge Group of Companies LLC (“Woodbridge”), a purported real estate investment fund, which later filed a voluntary Chapter 11 Bankruptcy petition. FINRA stated that he sold $10,831,645 in the funds’ notes to 58 investors, 30 of whom were customers of Quest Capital and received $260,864 in commissions in connection with the transactions. Continue Reading

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Sean J. Waters of Hemet, California submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he has been barred for allegedly engaging in churning and excessive and unsuitable trading in violation of Section 10(b) of the Exchange Act; Exchange Act Rule 10b-5; and FINRA Rules 2020, 2111, and 2010.

From December 2010 until April 2017, Mr. Waters was registered with Financial West Group as a General Securities Representative. Between January 2013 and March 2016, Waters engaged in churning and excessive and unsuitable trading in two accounts held by one customer. FINRA stated that during the relevant period, Waters exercised de facto control over and made all trading decisions in the customer’s account including which specific securities to buy and sell, the quantity of securities to buy and sell, and when to buy and sell the securities. According to FINRA, Waters executed 540 purchase transactions and executed 510 sale transactions. FINRA further stated that Water’s trading resulted in more than $88,000 in losses of the $150,000 the customer initially transferred to the firm. Waters allegedly earned 40 percent of his commissions solely from the trading in the customer’s account totaling $115,000. Continue Reading