Stockbrokers In The News - Law Offices of Robert Wayne Pearce

Mar 20, 2014

FINRA Suspends Carlo Corzine for Inadequate Due Diligence of Tactical Air Defense Services Stock

Carlo Wayne Corzine, a Boca Raton, Florida-based registered principal formerly employed by Shrewsbury, New Jersey-based Buckman, Buckman & Reid, Inc., submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he participated in the sale of more than 152 million unregistered shares of Tactical Air Defense Services, Inc. (“TADF”) on behalf of his customers, including the president and CEO of TADF and other accounts he controlled. The findings stated that Mr. Corzine’s customers opened accounts at Buckman, Buckman & Reid through which they deposited and sold large amounts of the stock, then immediately wired the sale proceeds out of the accounts. These sales resulted in proceeds of approximately $570,000 to the customers. FINRA’s findings also stated that Mr. Corzine failed to perform adequate due diligence prior to the stock sales despite various red flags indicating suspicious activities and potential violations of the registration requirements of the Securities Act of 1933. Because the stock was unregistered, it could not be sold absent an applicable exemption from registration. No exemption was available under the circumstances. The findings also included that Mr. Corzine neither adequately investigated the truth of the representations contained in a letter from the company’s president and CEO pertaining to TADF that accompanied many of the company’s deposits, nor did he independently verify certain relevant and material information the customer provided pertaining to the stock.

Mar 19, 2014

Peter Bruno Fined and Suspended by FINRA for Unsuitable and Unauthorized Transactions

NASD Rule 2310 known as the “Suitability Rule” provides that a stockbroker who recommends the purchase or sale of a security to have “reasonable grounds” for believing that the recommendation is suitable for the customer based on the facts disclosed by the customer relating to his investment objectives and financial situation and needs. Apparently, Mr. Bruno recommended an unsuitable closed-end bond fund for a customer who listed his investment objective as “preservation of capital” and his risk tolerance as “conservative.” The customer was retired and needed the monies deposited into his account within the next year and a half. By recommending the investment in a closed-end bond fund which was subject to volatility based on interest rates, the customer was exposed to unnecessary losses if he needed to liquidate the funds at a time when they had declined in value. This recommendation was inconsistent with the customer’s conservative risk tolerance and objective to preserve capital that he needed the next year.

Dec 11, 2013

FINRA Bars Raymond James Broker Paul Arnold for Misappropriation

According to FINRA, Raymond James and Associates, Inc. (Raymond James) stockbroker Paul David Arnold (Arnold) misappropriated and misused funds of an 88-year-old customer. The regulator alleged that during the period May 2010 through April 2011 that Arnold, a stockbroker in Raymond James’ Largo, Florida office, had customers sign blank checks that Arnold later made payable to his own wife and son without the customer’s authorization. FINRA found that Arnold misappropriated and misused $173,600 in customers’ funds. Arnold did not contest the charges and failed to appear for testimony on two separate occasions. The customer received an arbitration award against Arnold and appears to have settled his claim against the broker-dealer. Arnold has been permanently barred from serving in any capacity in the securities industry.