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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. FINANCIAL
INDUSTRY REGULATORY AUTHORITY
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Franklin Brent Porter AWC/2007008195901/June 2008 Porter engaged in outside business activities, for compensation, contrary to his member firm’s written procedures that require that representatives obtain the firm’s prior written permission. Porter’s firm never received, reviewed or approved a written request. Franklin Brent Porter: Fined $2,500; Suspended 10 business days |
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Michael Walter Firehock OS/2006004978301/June 2008 Firehock willfully failed to disclose material information on his Form U4. Firehock engaged in outside business activities without prompt written notice to his member firm, and submitted documents with false information to his member firm that claimed that he was no longer involved in outside business activities. Michael Walter Firehock: Fined $7,500; Suspended 2 years |
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Philip Paul Rusnak AWC/2006006744601/May 2008 Rusnak engaged in an outside business activity, for compensation, without prompt written notice to his member firm. Philip Paul Rusnak: Fined $5,000; Suspended 30 days |
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Victor Gregory Grieco AWC/2007008267701/May 2008 Grieco engaged in outside business activities without prompt written notice to his member firm. He referred public customers to an independent insurance broker to purchase life insurance and received $18,000 in commissions from the sale of the policies. Victor Gregory Grieco: Fined $10,000;Suspended 10 business days |
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Steven Paul Cariati (Principal) AWC/2008012269901/May 2008 Cariati engaged in an outside business activity, for compensation, outside the scope of his employment with a member firm and without prompt written notice to his member firm. Steven Paul Cariati: Fined $5,000; Suspended 10 business days |
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Dana Dewitt Toney 2006006995801/April 2008 Toney engaged in outside business activities without providing his member firm with prior written notice, and failed to respond to FINRA requests for information. Dana Dewitt Toney: Barred |
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Angelo David Castricone AWC/2008012269801/April 2008 Castricone engaged in outside business activities, for compensation, without providing prompt written notice to his member firm. Angelo David Castricone: Fined $2,500; Suspended 10 business days |
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Walter Yun (Principal) AWC/#2006006195001/January 2008 Yun engaged in outside business activities, for compensation, without prior written notice, or any notice at all, to his member firm. When Yun was questioned by his firm about his business activities, he made misrepresentations regarding any involvement, receiving compensation, distributing sales or marketing material, discussing the business activity with any individuals and knowing any firm customers that had invested in the company. Yun settled customer complaints about their losses by giving the customers promissory notes without telling his firm about the customer complaints or purported settlements. Yun guaranteed customers against loss. Yun executed discretion in customer accounts without the customers' prior written authorization and his firm 's prior written acceptance of the accounts as discretionary, and exercised discretionary authority without disclosing it to his firm. Walter Yun (Principal): Barred |
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Bill Singer's
Comment: This case is fairly typical of how regulators' often view certain
violations as the likely tip of an iceberg, and, as such, use such
opportunities as launching pads to uncover further misconduct. As is
often the case, an outside business activity (OBA) violation generally
involves some deceit or effort to cover-up by the offending RR. [For more
examples of this violation, visit the OBA page of
this site] It was bad enough that Yun failed to follow the OBA Rule
and give prior written notice to his firm, but he then compounded his
misconduct by misrepresenting the nature and extent of his
involvement. Moreover, as is often the natural result of such
deceitful conduct, Yun had a number of customer complaints and similarly
tried to handle those sub rosa by entering into undisclosed settlemetn.
[For more about these cases, visit the Undisclosed
Settlements page of this site].
Many would think that juggling two such violations would be enough, but, frankly, veteran defense lawyers and enforcement attorneys know that there is even more below the surface. Generally, if someone has covered up an OBA activity and entered into undisclosed settlements, there's a good chance that there's yet another improper side deal. The way it often goes is that the RR says to the customer: "Look, give me a chance here to make it up to you. Let me trade your account and I'll get your losses back." And if the once-burned client says 'no,' then the RR often retorts with "Okay, how about I guarantee you against any loss? Will that persuade you to keep this all quiet and give me a chance?" I have no idea what happened with Yun, but I am not surprised to see how the dominos fell here. |
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Phillip Michael Graff OS/#2005003325801/January 2008 Graff engaged in outside business activities, for compensation, and failed and neglected to give prompt written notice of his activities to his member firm . Graff falsified firm questionnaires by stating that he was neither engaged in outside business activities nor receiving compensation for outside business activities. The findings also stated that when confronted by his member firm , Graff denied being involved, and failed to provide his personal income tax returns to his firm and to respond to written questions from his firm. PhillipMichael Graff: Fined $5,000; Suspended 6 months |
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Carol Joy Bouabid OS/2005000029202/January 2008 Bouabid failed to provide prompt written notice to her member firm that she was engaged in outside business activities for compensation. Bouabid testified falsely during a FINRA on-the-record interview regarding her outside business activities and the reason she left another member firm. Carol Joy Bouabid: Fined $10,000; Suspended 2 years |
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