Caputo provided falsified account statements to a customer for a personal and a corporate account the customer held at Caputo’s member firm, with the intent of leading the customer to believe the all-but-worthless accounts held securities valued as high as $600,000; both accounts had incurred substantial losses.
The accounts were held at Caputo’s firm, the customer received account statements through the firm’s clearing firms; however, the customer also received fabricated account statements Caputo provided him. The typical one-page fabricated account statement listed the account name and number, the statement period, a false market value, a false cash balance and a false option value. These fake statements were transmitted by facsimile from Caputo’s home-office fax number. The false statements the customer received from Caputo reported that the personal account was valued at $292,020.53 and that the corporate account was valued at $325,446.36; in reality the personal account was valued at less than $70 and the corporate account had been closed.
Apparently relying on the values shown on the false statements, the customer contacted Caputo and requested that he wire $120,000 from the corporate account; Caputo advised the customer that there was no money in either account.
Caputo failed to appear and testify in a FINRA on-the-record interview.