NOTE: Stipulations of Fact and Consent to Penalty (SFC); 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 & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.
Hoshowski borrowed $137,000 from his member firm’s customers without prior written notice to, or prior approval from, his member firm. Hoshowski engaged in private securities transactions and failed to provide prior written notification to the firm. The aggregate value of all notes sold totaled approximately $1.06 million.
Hoshowski failed to respond to a FINRA request to provide testimony.
Eldredge participated in private securities transactions without giving prior written notice to,or obtaining prior written approval from, his member firms.With respect to one of those private securities transactions, Eldredge’s investment recommendation was unsuitable in that the customer funded the transaction by mortgaging his personal residence. Eldredge engaged in outside business activities without providing prompt written notice to one of his member firms.Eldredge failed to provide FINRA with requested documents.
approved registered representatives’ participation away from the firm in raising capital for a company by selling its stock, but imposed conditions on their participation and required that the stock certificates not bear restrictive legends;
failed to take reasonable steps to monitor or determine compliance with these conditions, including conducting an inquiry of “red flags” that suggested violations of federal securities laws; and
Fischer failed to detect and prevent the representatives’ distribution of unregistered securities in their capacity as underwriters.
Although Fischer was aware these transactions constituted private securities transactions for compensation, he did not cause the firm to record the transactions on its books and records and supervise them as if they were firm transactions. Further, Fischer failed to supervise the registered representatives in a manner reasonably designed to achieve compliance with applicable laws, rules and regulations. Acting through Fischer, the Firm failed to supervise and record the representatives’ private securities transactions.
First Financial Equity Corporation: Censured; Fined $20,000
George Edward Fischer: Fined $20,000; Suspended 15 business days in Principal capacity only
Leggett engaged in private securities transactions with member firm customers and failed to give written notice to, and receive written acknowledgment from, his member firm. Leggett inaccurately answered questions on his firm’s questionnaires regarding his outside business activities.
Raymond Francis Leggett III: Fined $5,000; Suspended 6 months
Hansen engaged in a private securities transaction for compensation, and failed to provide prior written notice to, or obtain prior written approval fromhismember firm.
Craig William Hansen: Fined $5,000; Ordered to pay restitution to customer of $1,000 plus intrest; Suspended 1 month in all capacities
Sohn engaged in private securities transactions for compensation, and failed to provide his member firm with written or oral notice, and failed to obtain the firm’s approval to engage in such activity. Sohn failed to respond to FINRA requests for additional information and documentation.
Friedman engaged in a private securities transaction without prior written notice to, or prior written approval from, his member firm, and received a referral fee as compensation. Friedman failed to timely and completely respond to a FINRA request for information.
Jared Scott Friedman: Fined $15,000; Ordered to pay $500, plus interest, in restitution to a customer; Suspended 7 months in all capacities.
Czerny participated in private securities transactions and failed to give prior written notice to his member firm of the proposed transactions and failed to receive his firm’s prior written approval to engage in the transactions.
Michael Kipland Czerny: Fined $5,000; FINRA did not impose disgorgement because Czerny had already paid the customer $150,000, which exceeds the amount of his financial gain; Suspended 1 year
Inserra engaged in a private security transaction for compensation, and failed to provide his member firm with prior written notice of his role in this transaction and did not receive his firm’s written approval or acknowledgement of his role in this transaction.
Randy Lee Inserra: Fined $100,000; Suspended 1 year
Del Toro recommended and effected securities purchases to a customer that were unsuitable in light of the customer’s age and financial condition, and received $76,650 in commissions from the investment. Del Toro engaged in private securities transactions and failed to provide written notice to his member firms describing in detail the proposed transactions, his role therein and stating whether he had received, or would receive, selling compensation in connection with the transactions. Del Toro guaranteed the customer in writing against loss.
participated in private securities transactions, received compensation for his participation, failed to provide his member firm with prior written notice, and failed to receive the firm’s prior written approval;
engaged in outside business activities and failed to provide his firmwith prompt written notice.
negligently failed to advise investors and firm customers of material facts concerning a real estate venture and his involvement; specifically, that proceeds from the venture were to be applied towards defaulted bank loans for which he was personally liable.
Patel engaged in private securities transactions without prior written notice to, or prior written approval from, his member firm. Patel sent and received business-related emails from firm customers at his personal (non-firm) email address and then deleted the emails to avoid detection, without providing copies to the firm.
Kluge engaged in an outside business activity, for compensation, without prompt written notice to his member firm, and also participated in private securities transactions, for no compensation, and failed to provide his member firm with written notice of the transactions and did not receive the firm’s approval to participate in the transactions.
Darrel Gideon Kluge: Fined $15,000; Suspended 1 year
Frick engaged in outside business activities and private securities transactions without prior written notice to her member firm. Frick was provided a money order by a customer in order to open an account at her member firm on behalf of the customer’s children, misplaced the money order and, in an attempt to settle the customer’s potential complaint in this matter, deposited $1,100 of her own personal funds into an account at her firm for the benefit of the customer’s children without notifying the customer or the firm. Frick used the funds she had previously deposited into the account to purchase mutual funds for the account without the customer’s knowledge, authorization or consent.
Thomas participated in private securities transactions and received compensation, but failed to provide prior written notification to, and receive prior written permission from, the firm to participate in the private securities transactions. Thomas failed to disclose these private securities transactions when he completed the firm’s annual compliance check list. Subsequently, Thomas provided an incomplete response to a FINRA request for information, and failed to respond to subsequent requests for information and documents.
Brueggemann participated in private securities transactions without prior written notice to, and prior written approval from, his member firm. Brueggemann failed to provide his member firm with written notice of outside business activities and failed to respond to FINRA requests for information.
Jan Lynn Brueggemann: Fined $25,000; Suspended 1 year; Barred in all capacities
Stadelmann received $1.5million from members of the public to purchase privately held companies’ stock but used the funds for other purposes. Stadelmann engaged in private securities transactions, for compensation, without his member firm’s prior permission. Also, Stadelmann borrowed $719,000 from firm customers in violation of FINRA rules. Stadelmann failed to respond to FINRA requests for documents and to appear for an on-the-record interview.
Clay engaged in private securities transactions without written notice to, and approval or acknowledgement from, his member firm, and subsequently failed to respond fully to FINRA requests for information and failed to appear for an on-the-record interview.
REDACTED electronically affixed two customer names to three solicitor disclosure statements without their specific authority, and created an email that was purportedly received from the customer, which he forwarded along with the false disclosure statements to his member firm for processing. By creating a false disclosure statement,REDACTED caused his member firm to violate the requirements of the Investment Advisors Act of 1940 and, by creating the purported email, REDACTED caused his firm’s records to be inaccurate and thereby prevented it from meeting its obligation to preserve, for a period of not less than six years, the first two years in an accessible place, all records required pursuant to SEC Rule 17a-4(b)(4).
Also, REDACTED engaged in outside business activities and private securities transactions without written notice to, or approval from, his member firm. REDACTED failed to respond to FINRA requests for documents and information.
Kaeser engaged in an outside business activity and failed to give prompt written notice to his member firm. Kaeser participated in private securities transactions without first providing written notice to his firm.
Roland Karl Kaeser (Principal): Fined $15,000; Suspended 1 year
Gane participated in private securities transactions involving the sale of $3.8 million of convertible debentures issued by affiliated entities he controlled, without prior written notice to, or prior approval from, his member firms. Gane failed to appear for a FINRA on-the-record interview.
While registered with member firms, Bonner engaged in outside business activities, for compensation, without prompt written notice to the firms. Bonner completed an Outside Activities Disclosure Form, which one firm required, and did not disclose his outside business activities. Also, Bonner engaged in private securities transactions, for compensation, without prompt written notice to, and approval from, his member firms. Bonner borrowed $900,000 from firm customers when firm procedures prohibited such borrowing.
Cline engaged in private securities transactions without prior written notice to, or prior approval from, hismember firm. The findings stated that Cline engaged in outside business activities without prompt written notice to his firm. Cline provided false information about his private securities transactions and outside business activities on firm compliance questionnaires.
Weaver and Will participated in private securities transactions, for compensation, in the sale of securities issued by another firm and did not provide prior written notice to, or receive prior approval from, their member firm. They incorrectly answered “no”when asked on required annual compliance questionnaires whether they had ever been paid or received a referral or finder’s fee from anyone for referring securities clients and/or business.
Randy Brian Weaver: No fine in light of financial status; Suspended 9 months
Richard Lance Will: No fine in light of financial status; Suspended 8 months
Jones participated in a private securities transaction without prior notice to his member firm and failed to respond to FINRA requests for information and to appear for on-the-record interviews.
Reysack engaged in private securities transactions outside the scope of his employment with his member firm and without providing prior written notice to, or receiving written approval or acknowledgment from, his member firm of his role in the transactions. Reysack had previously disclosed his involvement in a real estate venture to the firm and the firm approved this activity, but cautioned him not to solicit other individuals to invest in his real estate venture.
Michael Dean Reysack: Fined $10,000; Suspended 6 months
Jewett participated in private securities transactions, for compensation, without prior written notice to, or prior written approval from, his member firm.
Jeff David Jewett: Fined $15,000 (includes $5,000 disgorgement); Suspended 18 months in all capacities
Pickle engaged in a private securities transaction and failed to give prior written notice to, or receive written approval from, his member firm. He also engaged in outside business activities, for compensation, without prompt written notice to his member firm. Pickle denied receipt of outside compensation when his member firms pecifically asked him.
Phillip Alan Pickle (Principal): Fined $10,000; Suspended 9 months in all capacities
Meyer participated in a private securities transaction, for compensation, and failed to give prior written notice to, and receive written approval from, his member firm. The sanction was based on findings that Meyer failed to appear for a FINRA on-the-record interview.
Jacobs failed to properly supervise the private securities transactions of registered representatives at his member firm and failed to ensure that the transactions were recorded on the firm’s books and records.
Alan Lawrence Jacobs (Principal): Fined $10,000; Suspended 30 business days in Principal capacities only.
James participated in private securities transactions outside the regular course and scope of his employment relationship with his member firms and did not provide written notice to, or obtain written approval from, his firms prior to engaging in the offer and sale of limited partnerships.
Bobby Glenn James: Fined $20,000; Suspended 6 months in all capacities
Robinson participated in private securities transactions without prior written notice to, and prior written approval from, his member firm; and failed to respond to FINRA requests for information.
Aulwes engaged in outside business activity, for compensation, without prompt written notice to his member firm. Aulwes participated in private securities transactions without prior written notice to, and written approval or acknowledgement from, his member firm.
Noah James Aulwes: Fined $10,000; Suspended 1 year in all capacities
Before my second career as a lawyer, I was the third generation of my family in the wine and liquor industry. In 1981, I started law school; and in 1982, I was hired as a law student in Smith Barney, Harris & Upham's Legal Department. After I graduated law school, I was a regulatory lawyer with the American Stock Exchange and then with the NASD (now... Read On