Library - Law Offices of Robert Wayne Pearce

Clearview Correspondent Services Fined $1 Million for Bad Options Reporting

Clearview Correspondent Services, LLC (Clearview) of Richmond, Virginia 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 the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it failed to report positions to the Large Options Position Reporting (LOPR) system. According to FINRA, Clearview (now known as BB&T Securities), failed to properly aggregate positions of over 1,000 accounts that were acting in concert under the coms review periods. In addition, FINRA found that the firm failed to “establish and maintain a supervisory system that was reasonably designed to achieve compliance with the applicable securities laws and regulations, and FINRA Rules, concerning the reporting of options positions to the LOPR.” Consequently, Clearview, n/k/a BB&T, was censured and fined $1,000,000.

Mar 11, 2015

Dawson James Securities Fined For Failing to Conduct Adequate Due Diligence

Dawson James Securities, Inc. of Boca Raton, Florida 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 the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it “failed to establish and implement an adequate system to determine whether a former registrant’s disclosed outside business was properly characterized as an outside business activity or whether it should be treated as an outside securities activity subject to the requirements of NASD Rule 3040.”

Mar 6, 2015

Former UBS Broker Decries the Marketing and Sale of Structured Products to Conservative Investors

Michael Hadden, a former broker with UBS Wealth Management (UBS), has made claims that UBS allegedly made it “impossible” for his to continue working due to “… its various unethical practices with respect to customers …” as stated in his original arbitration claim with the Financial Industry Regulatory Authority (FINRA). Mr. Hadden has asked a federal court, the U.S. District Court for the Western District of Kentucky, to overturn FINRAs arbitration award which ordered him to repay over $300,000 in bonus money, attorneys’ fees and interest. According to Mr. Hadden’s court filings, UBS would allegedly mislabel conservative investors as moderate in order to avoid future restitution and penalties. As Mr. Hadden noted in his court documents, “… the risk reporting system is done … to protect UBS from future claims of lack of suitability from the client or FINRA.”

Mar 4, 2015

Former Westport Resources Investment Services Broker Suspended by FINRA for Unauthorized Oil and Gas Limited Partnership Sales

Brian Lewis Pittman, a former broker employed by Naples, Florida-based Westport Resources Investment Services, Inc. (Westport Resources), submitted a Letter of Acceptance, Waiver and Consent in which he consented to, but did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that he participated in private securities transactions without giving the required written notice and without the approval of Westport Resources. FINRA found that Brian Pittman referred two Westport Resources account holders to invest in an oil and gas limited partnership interest in the Permian Advanced Oil Recovery Investment Fund I, LP, offered by Quest Energy Management Group, Inc. The two Westport customers, according to FINRA, invested $375,000 in the Permian offering and Mr. Pittman received approximately $45,000 from Quest in compensation, which he ultimately ended up returning when he was told to do so.

Mar 2, 2015

Citigroup Hit With $3 Million Fine for Failure to Supervise ETF Sales

Citigroup Global Markets Inc., (Citigroup) submitted a Letter of Acceptance, Waiver and Consent in which the firm consented to, but it did not admit to or deny, the described sanctions and the entry of the Financial Industry Regulatory Authority’s (FINRA) findings that it failed to deliver prospectuses with respect to the sales of exchange-traded funds (ETFs) to its investor customers. According to FINRA, Citigroup failed to deliver prospectuses for nearly 255,000 investor purchases of approximately 160 ETFs over a three-month period. Further, FINRA found that from 2009 through April 2011, Citigroup may have failed to deliver prospectuses for more than 1.5 million purchases of ETFs by investors. Moreover, Citigroup’s supervisory system failed to achieve compliance with Federal securities laws with regard to prospectus-delivery requirements, especially since the firm allegedly detected certain failures back in 2009.

Feb 27, 2015

Two Former Mid Atlantic Capital Brokers Named in FINRA Complaint Alleging Hedge Fund Fraud

Timothy Dembski, of Lancaster, New York, and Walter Grenda Jr., of Buffalo, New York, were named in a Financial Industry Regulatory Authority (FINRA) complaint alleging that they fraudulently induced customers to invest in a hedge fund, the Prestige Wealth Management Fund, LP. The FINRA complaint alleges that Timothy Dembski and Walter Grenda Jr. led investors to believe that the Prestige Wealth Management Fund (Prestige Fund) was a growth fund and was based on a computer algorithm, which included risk protections and stop-losses, to limit investor losses in the hedge fund. However, FINRA alleged that the Prestige Fund was a speculative, aggressive investment, was not obligated to follow the computer algorithm, and lost over 80% of its value in its last full month! Mr. Dembski and Mr. Grenda allegedly recommended the Prestige Fund to investors with limited investment experience, who had never invested in hedge funds before, and who used their retirement assets to invest in the fund.

Feb 26, 2015

FINRA Fines Oriental Financial Services for Failing to Supervise Puerto Rico Bond Fund Investments

Oriental Financial Services Corp. (Oriental) was fined $245,000 by the Financial Industry Regulatory Authority (FINRA) for failing to maintain a proper supervisory system to comply with Federal securities laws, namely, that its supervisory system failed to identify and review concentrated purchases of Puerto Rico municipal bonds and closed-end funds; and failing to disclose on customer confirmations the markups and markdowns for riskless principal transactions in Puerto Rico closed-end funds. Without admitting or denying the findings, Oriental consented to FINRA’s sanctions and findings that if failed to disclose approximately $2.9 million in markups and markdowns on customer trade confirmations. According to FINRA, Oriental’s registered representatives continued selling the municipal bonds and closed-end funds even after the municipal bond rating had been downgraded to junk status. Consequently, Oriental Financial Services has agreed to submit to FINRA the procedure of how it intends to properly identify, review and correct any unsuitable, concentrated Puerto Rico bond purchases.

Feb 25, 2015

Newbridge Securities Fined By FINRA for Failing to Supervise Corporate Bond Sales

Newbridge Securities Corporation (Newbridge) of Fort Lauderdale, Florida was fined $138,000 by the Financial Industry Regulatory Authority (FINRA) for failing to supervise corporate bond transactions. Without admitting or denying the findings, Newbridge consented to FINRA’s sanctions and to the entry of findings that it sold corporate bonds to investors and failed to sell the bonds at a fair price, considering the relevant circumstances, like market conditions. FINRA found that Newbridge failed to conduct proper due diligence with respect to the best inter-dealer market and thereby failed to buy or sell the corporate bonds in a market which would result in a price to its investors which was as favorable as possible.

Feb 18, 2015

Popular Securities Fined By FINRA for Failure to Supervise Puerto Rico Bond Fund Investments

Popular Securities, Inc. n/k/a Popular Securities, LLC, was fined $125,000 by the Financial Industry Regulatory Authority (FINRA) for failure to supervise violations involving over-concentration of investments in Puerto Rico municipal bonds and closed-end bond funds in many of its customers’ accounts. Without admitting or denying the findings, Popular consented to the sanctions and to FINRA’s findings that between July 1, 2011 and June 30, 2013, it failed to supervise its customers’ Puerto Rico bond fund investments, even after the bond rating had been downgraded to junk bond status. Following the junk bond downgrade, FINRA found that Popular Securities’ customers continued to purchase concentrated positions of the Puerto Rico securities.

Feb 11, 2015

Paramount Metals Exchange and Others Ordered to Pay CFTC $2.5 Million for Precious Metals Fraud

The U.S. Commodity Futures Trading Commission (CFTC) has ordered Boca Raton, Florida resident Isaiah Goldman and Delray Beach, Florida resident Brock Catronio, along with their companies Paramount Metals Exchange, LLC and Paramount Credit, LLC (collectively Paramount), to pay more than $2.5 million in sanctions for illegal off-exchange precious metals fraud. The CFTC Order states that Isaiah Goldman (Goldman), Brock Catronio (Catronio) and Paramount solicited investors to make cash purchases of precious metals, falsely representing how the physical metals would be held on the investors’ behalf. According to the Order, Goldman, Catronio and Paramount treated the metals transactions as financed purchases, with the investor only paying a portion of the purchase price, and then taking out a loan for the balance of the purchase price.

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