NOTE: Offers of
Settlement (OS) and Letters of Acceptance, Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying
the allegations, but consent is given to the described sanctions and to
the entry of findings.
Continuing Education Requirements
by Bill Singer firstname.lastname@example.org
Enrico Mazzola (AWC/C10030092/December 2003)
Engaged in activities requiring registration while registration status
was inactive due to his failure to complete Regulatory Element.
- Fined $5,000; Suspended in all capacities 15 business days
Baldwin & Clarke Capital Markets, Inc. and
John Joseph Clarke, Jr. (AWC/C11030037/December 2003)
While acting as placement agent for a private
offering, firm failed to establish a proper escrow account at a
bank. Also, authorized the partial release of $280,000 to issuers
when the $650,000 mini-contingency had not been reached. Further, because
the expiration date had passed the escrowed funds should have been
returned in investors.
Additionally, permitted an individual to act as an RR when his
registration was inactive per Regulatory Element requirements of
Continuing Education requirement; and failed to have a written needs
analysis and written training plan to comply with the Firm Element.
- Baldwin & Clarke Capital Markets, Inc. and John Joseph Clarke,
Censured; Fined $15,000 (jt/several)
Steve Skytte (AWC/C02030059/November 2003)
Failed to establish and maintain a system to supervise RRs reasonably
designed to comply with NASD rules. He also failed to complete in a
timely manner the Regulatory Element of CE.
- Steve Skytte
Fined $6,000; Suspended 20 business days all capacities
Quest Capital Strategies, Inc. (AWC/C02030058/November
Firm maintained registrations of reps who were not active in firm's IB
or securities business or were not functioning as RRs, and allowed
registered individuals to perform registered duties when their
registrations were inactive due to failure to complete the Regulatory
Element of CE. Also had inadequate supervisory procedures.
- Quest Capital Strategies, Inc.
Censured; Fined $41,000
Banc One Securities Corporation (AWC/C8B030018/November
Firm permitted individuals to act as registered persons while
registration was inactive due to failure to timely complete Regulatory
Element of CE. Firm received written customer complaints and fialed
to timely file. Firm used improper confidentiality clauses in
settlements with public customers that prohibited or inhibited customers from
disclosing the settlement terms and underlying facts to regulators.
- Banc One Securities Corporation
O'Brien & Shepard, Inc. Jeffrey Peter
Flaster, and Michael Sutart Petrucelli (AWC/C9B030065/November 2003)
Firm acting through Flaster permitted a representative to act as a
municipal securities representative prior to qualifying and registering.
Firm acting through Petrucelli permitted RRs to act in such capcity while
their registration were inactive for failure to complete Regulatory
Element of both NASD and MSRB CE. Firm failed to establish and
maintain adequate supervisory procedures.
- O'Brien & Shepard, Inc.
- Jeffrey Peter Flaster,
- Michael Sutart Petrucelli
Censured and Fined $25,000 joint and several
D.R. Mayo & Co., Inc. and
Donald Richard Mayo (OS/C0`030005/November 2003)
Firm acting through Donald Mayo permitted individuals to perform
duties as registered persons when they were deemed inactive for failure to
comply with the Regulatory Element of CE. Firm acting through May
failed to establish and maintain adequate supervisory procedures, failed
to promptly report to NASD customer complaints that were settle for more
then $15,000., and failed to maintain adequate Net Capital (and failed to prepare
and maintain monthly Net Capital computations).
- D.R. Mayo & Co., Inc.
and Donald Richard Mayo
Censured, Fined $17,5000 joint/several
Harrison Douglas, Inc. and
Douglas Wayne Schriner (OS/C31030028/November 2003)
Registered Principal Schriner failed
to timely disclose material facts on his U4. Also filed false and
misleading information on the U4 and did not complete the Regulatory Element
of CE and became inactive, but firm allowed him to engage in registered
activity. Firm's supervisory procedures were inadequate for CE
- Harrison Douglas, Inc.
Censured; Fined $25,000 (jt./several)
- Douglas Wayne Schriner
Fined $25,000 (jt.
several); Suspended 30 days in all capacities.
United Securities Alliance,
Registered persons failed to timely take the Regulatory Element of CE
and became inactive, but firm allowed them to engage in registered
activity (and RRs generated transaction-based compensation). Firm
also allowed RRs not to participate in the Firm Element component.
Firm could only provide evidence that 157 of 1,130 RRs attended 2000
annual compliance meeting. Firm failed to check the background of 17
new hires and failed to obtain Form u5 from five previous employers of new
hires. Also, firm failed to comply with Rule 3070 reporting
obligations, failed to conduct annual inspections of offices of
supervisory jurisdiction, and failed to register off-site locations with
NASD. Moreover, firm failed to promptly notify NASD of branch office
changes of address. Finally, firms supervisory system and written
supervisory procedures were inadequate.
Censured; Fined $111,425
Clayton, Williams &
Firm permitted registered persons to act in registered capacities
while NASD registrations were inactive due to failure to timely complete
Regulatory Element of CE.
Clayton, Williams & Sherwood Investments
Censured; Fined $12,500
Firm permitted an individual to perform duties as a General Securities
Principal while in non-compliance with CE Rule (and registration status
inactive). Firm, acting through an individual, also failed to
comply with its Membership Agreement because it failed to file a written
notice and application to NASD at least 30 days prior to changing
ownership. Also failed to promptly notify NASD of intent to open a
branch office. Additionally, found to have non-compliant supervisory
system over branches, in that the NASD Electronic Signature and
password was used by a person other than a registered principal.
Censured; Fined $10,000
ESA Securities and John J.
ESA, acting through Derrico,
-- two statutorily disqualified persons to be associated with and act on
behalf of member;
-- one individual to act as a general securities representative, equity
trader, and general securities principal without such registrations;
-- three individuals to act as registered persons when their registrations
were inactive due to untimely completion of the Regulatory Element of
NASD's Continuing Education Rule.
Additionally, ESA, acting through Derrico, conducted a securities business
while failing to maintain minimum net capital.
ESA Securities, Inc.
Censured; Fined $12,500
John J. Derrico
Fined $12,500; suspended principal capacity 30 business days
Hanmi Securities, Inc. and
Eul Hyung Choi (AWC/C02030023/July 2003)
Firm, acting through Registered Principal Choi, permitted a
registered persons including Choi to act in a registered capacity when
they had failed to complete the Regulatory Element of Continuing
Hanmi Securities, Inc. Eul
Hyung Choi Censured; Fined $20,000(joint and several)
Banyan Securities, LLC and Bruce
Edward Neff (AWC/C01030014/July 2003)
Firm, acting through Registered Principal Neff, permitted a
registered persons to act in a registered capacity when they had failed to
complete the Regulatory Element of Continuing Education.
Banyan Securities, LLC Bruce Edward Neff Censured; Fined $15,000(joint and
APS Financial Corporation
and John Gerard Lindquist (AWC/C06030008/July 2003)
Firm, acting through Registered Principal Lindquist, permitted a
registered person to act in a registered capacity when individual had
failed to complete the Regulatory Element of Continuing Education.
APS Financial Corporation
John Gerard Lindquist Censured; Fined
$15,000(joint and several)
Recom Securities, Inc.
Firm permitted RRs to act as
registered persons, including receipt of compensation for securities
transactions while registration was inactive due to untimely completion of
Regulatory Element. Also, firm's written supervisory procedures
inadequate in Regulatory Element issues.
Fined $27,500; required to
update written supervisory procedures per NASD Membership and Registration