Brookville Capital Partners LLC fka New Castle Financial Services LLC
AWC/2008011678303/August 2010

Acting through its chief compliance officer (CCO), the firm: 

• failed to establish and implement an adequate AML program and related procedures; adequately identify, investigate and respond to red flags of suspicious activities;
• timely file a Suspicious Activity Report (SAR); and
• provide AML training for firm personnel for one year.

Acting through a registered representative, the firm

• improperly facilitated the distribution of approximately 20 million shares of various unregistered securities;
• operated an unregistered branch office, in violation of the restriction on business expansion contained in its membership agreement, and
• engaged in improper telephone solicitations (from the unregistered office) by making materially false representations and omitting material facts in connection with the offer of securities and by using misleading telemarketing scripts that a registered principal had not approved.

Acting through the registered representative and CCO, the firm failed to perform adequate searching inquiries and take necessary steps to ensure that transactions did not involve distributions of unregistered and/or restricted securities.

Acting through a registered representative and firm principal, the firm sold securities to public investors using a private placement memorandum that omitted to disclose a convicted felon’s association with the issuer, a material fact to any reasonable investor.

Acting through various FINOPs, the firm

• failed to maintain accurate financial books and records,
• filed inaccurate FOCUS reports and
• operated a securities business while under minimum net capital requirements.

Acting through the CCO and other compliance officers, the firm

• failed to forward customer funds it received in connection with contingency offerings to an escrow agent by noon of the next business days after receipt of such fund;
• adequately review and approve customer correspondence;
• timely and accurately report customer complaints;
• timely update Uniform Applications for Securities Industry Registration or Transfer (Forms U4) and Uniform Termination Notices for Securities Industry Registration (Forms U5);
• comply with the Firm Element of the Continuing Education Requirement for a year;
• conduct an annual compliance meeting; and
• establish an adequate business continuity plan, which consequently led to the loss of access to certain customer records upon termination of its relationship with a particular clearing firm.

The firm had additional supervisory deficiencies, including that

• its written supervisory procedures failed to establish adequate procedures for review of producing managers’ customer account activities,
• it failed to have written supervisory procedures for identifying producing managers that should be subject to heightened supervision, and
• failed to place certain producing managers on heightened supervision, in that, acting through various individuals, the firm failed to clearly assign each registered person to an appropriately registered representative and/or principal responsible for supervising that person’s activities, and designate principals with actual authority to carry out the supervisory responsibilities over the firm’s business.

Acting through a supervising principal, the firm failed to reasonably supervise registered representatives working out of the unregistered branch office.

Acting through firm officers, the firm failed to establish and maintain a supervisory system reasonably designed to supervise the sales activities of firm personnel conducted outside of its registered offices, and failed to establish and maintain a supervisory system for determining whether customer securities were properly registered or exempt from registration.

Acting through its CCO, the firm failed to implement adequate procedures to ensure that the firm did not telephone persons who stated they did not wish to receive calls and/or who registered on the national do-not-call registry, and failed to adequately update and maintain a do-not-call list.

Acting through various supervisors, the firm failed to perform heightened supervision over numerous individuals.

Brookville Capital Partners LLC fka New Castle Financial Services LLC : Brookville Capital Partners LLC fka New Castle Financial Services LLC : Censured; FIned $200,00; Required to retain an independent consultant to conduct a review of the adequacy of its policies, systems, procedures and training regarding AML rules and regulations; compliance with Section 5 of the Securities Act of 1933; and rules and regulations relating to private placements, financial requirements, customer complaints and supervision. In addition, the firm was required to have its associated persons complete 16 hours of AML continuing education training and to fully and promptly cooperate with FINRA in any and all investigations.

Tags: AML  SAR    Unregistered Securities  Unregistered Office  Telemarketing  Private Placement  Felony  Annual Compliance Meeting  Contingency Offering  Producing Manager  

Carola Jean Fuller
AWC/2009018811801/August 2010

 Fuller failed to timely disclose material information on her Form U4.

Carola Jean Fuller: Fined $5,000; Suspended 6 months

Frank Gerallimo Manziano
OS/2009016956501/August 2010

Manziano willfully failed to disclose a material fact on his Form U4. Manziano engaged in outside business activities without providing prompt written notice to his member firm and contrary to his firm’s written supervisory procedures requiring written approval or disapproval from a supervisory principal of any outside business activity requests.

Frank Gerallimo Manziano : Fined $15,000; Suspended 4 months

Joshua T. Thatcher (Principal)
AWC/2009018404901/August 2010

Thatcher willfully failed to timely amend his Form U4 to disclose material information, and did not amend his Form U4 to reflect the material information until after the firm became aware of the information and completed an internal investigation. Thatcher completed his member firm’s annual individual compliance review form, where one of the questions asked if he had complied with the responsibility for the prompt preparation and submission of Form U4 amendment as FINRA required; he checked the “YES” box.

Joshua T. Thatcher (Principal): Fined $5,000; Suspended 9 months

Tags: Annual Compliance Certification  

Kenneth Ray Johse Sr.
AWC/2009018338201/August 2010

Johse willfully failed to amend his Form U4 to disclose a material fact.

Kenneth Ray Johse Sr. : Fined $5,000; Suspended 6 months

Kimberly Ann Putichdudek Ebling (Principal)
AWC/2009020252101/August 2010

Ebling willfully failed to disclose material information on her Form U4.

Kimberly Ann Putichdudek Ebling (Principal): Fined $5,000; Suspended 6 months

Michael John Ferraro(Principal)
AWC/2008016025801/August 2010

Ferraro willfully failed to timely update his Form U4 with material information, and also failed to timely update his Form U4 with additional material information.

Michael John Ferraro(Principal): Fined $5,000; Suspended 3 months

Patrick J. Grywalski
OS/2009017153701/August 2010

Grywalski failed to disclose material facts on his Form U4, and he failed to respond to FINRA requests for information.

Patrick J. Grywalski : Fined $5,000; Suspended 1 year

Peter Kai Chang
2008015348101/August 2010

Chang willfully failed to amend his Form U4 to disclose material information.

Peter Kai Chang: Barred

Robert Norman Gest Jr. (Supervisor)
OS/2007011348301/August 2010

Gest

• recommended risky and illiquid CMO positions to his customers, and intentionally and/or recklessly made misrepresentations of material facts and omitted to disclose material facts to customers in connection with their CMO investments;
• failed to provide his customers with material information concerning the bonds as contained in prospectuses, prospectus supplements or any offering circulars relating to the particular CMO tranches purchased that document various applicable risk factors that an investor should consider before investing;
• recommended CMO positions to customers without investigating and understanding the products and without reasonable grounds to believe that CMO investments were suitable, as he lacked an understanding of the material characteristics of, and risks associated with, the CMOs offered;
• lacked reasonable grounds to believe the CMO program and CMO investments were suitable for his customers based upon their disclosed investment experience, investment objectives, financial situation and needs, and he did not have reasonable grounds to believe that the use of margin was suitable for customer CMO purchases;
• exercised discretionary authority in customer accounts without his customers’ prior written authorization and his member firm’s prior written acceptance of the accounts as discretionary; and
• willfully failed to timely update his Form U4 with material facts.

Robert Norman Gest Jr. (Supervisor): No Fine in light of financial status; Suspended 18 months

Tags: CMO    Discretion  

Ryan Matthew Glaspell (Principal)
AWC/2008015576601/August 2010

Glaspell failed to disclose material information on his Form U4 and failed to completely respond to FINRA requests for information and documents.

Ryan Matthew Glaspell (Principal): Fined $15,000; Suspended 21 months

Barry Eden Gitarts
AWC/2008015147201/July 2010

Gitart willfully failed to disclose material information on his Form U4.

Barry Eden Gitarts : Censured; Fined $5,000; Suspended 6 months

Matthew Alan Campbell
AWC/2009018000801/July 2010

Campbell failed to timely disclose material information on his Uniform Application for Securities Industry Registration or Transfer (Form U4) and failed to respond to FINRA requests for information.

Matthew Alan Campbell: Barred

Noble Bradford Trenham (Principal)
2007007377801/July 2010

Trenham structured cash deposits for a customer in order to evade federal reporting requirements by obtaining cashier’s checks for under $10,000. Trenham functioned in a principal capacity with his member firm while being suspended in that capacity. Trenham willfully failed to update his Form U4 with material information.

Noble Bradford Trenham (Principal): Barred

Tags: AML  

Robert Martin Martinez
AWC/2009018362902/July 2010

Martinez received checks totaling $20,000 from a non-customer, intended for investment, and improperly used the funds for his personal use. Martinez willfully failed to amend his Form U4 to disclose material information and failed to timely respond to FINRA requests for information and documents.

Robert Martin Martinez: Barred

Tags: Check    

Steve G. Kelly
OS/2008015104301/July 2010

Kelly failed to amend his Form U4 to disclose material facts. The omissions caused his member firm to associate a person subject to a statutory disqualification for over six months. Kelly failed to appear for a FINRA on-the-record interview.

Steve G. Kelly: Barred

Alexis Jaqueline Pollard
2008013810901/June 2010

Associated Person Pollard willfully failed to disclose material information on her Form U4; and failed to respond to FINRA requests for information.

Anthony Amos Inkumsah
AWC/2009017023601/June 2010

Inkumsah failed to amend his Form U4 to disclose material information.

Anthony Amos Inkumsah: Fined $5,000; Suspended 20 business days

Brookstone Securities, Inc.
AWC/2008011675701/June 2010

Brookstone Securities failed to ensure that each of its registered representatives and registered principals participated in an annual compliance meeting. The Firm failed to timely update a registered representative’s Uniform Application for Securities Industry Registration or Transfer (Form U4) to disclose required information and failed to timely disclose customers’ complaints pursuant to NASD Rule 3070.

The Firm failed to report quarterly statistical customer complaints; failed, in some instances, to create and maintain a record of customers’ complaints and related records that included the complainant’s information; and, alternatively, failed to maintain a separate file that contained complainant’s information.

The Firm failed to report transactions to the Trade Reporting and Compliance Engine (TRACE) and failed to evidence the creation and maintenance of order tickets for sell transactions in corporate bond transactions.

Brookstone Securities, Inc. : Censured; Fined $17,500

Tags: Annual Compliance Meeting    

Camelia Marie Pope
AWC/2009018311501/June 2010

Pope willfully failed to amend her Form U4 to disclose a material fact; and then failed to timely respond to FINRA requests for information.

Camelia Marie Pope : Fined $5,000; Suspended 9 months

Erin F. Harrison
AWC/2008013951601/June 2010

Harrison failed to disclose material information on her Form U4.

Erin F. Harrison: No Fine in light of financial status; Suspended 45 days

Jonathan Randolph Bock
AWC/2008015462601)/June 2010

Bock failed to amend his Form U4 to disclose a material fact.

Jonathan Randolph Bock : Fined $5,000; Suspended 15 business days

Lawrence Bruce Card (Principal)
AWC/2009017985801/June 2010

Card falsely completed his member firm’s annual compliance checklist certification and willfully failed to disclose material information on his Form U4.

Lawrence Bruce Card (Principal): Fined $5,000; Suspended 6 months

Nicholas Jose Tangco
2008016429801/June 2010

Tangco willfully failed to disclose material facts on his Form U4; failed to timely and to completely respond to FINRA requests for information and documents.

Nicholas Jose Tangco : Fined $10,000; Suspended 2 consecutive terms of 9 months and 2 years.

Walter Allen Ellis (Principal)
2007007873101/June 2010

Ellis engaged in outside business activities without providing prompt written notice to his member firm. Ellis managed customers’ accounts and effected trades in commodity futures contracts and commodity futures options through commodity trading firms and earned commissions from the firms. Ellis completed quarterly compliance questionnaires for his firm that inquired if he had engaged in an outside business activity while associated with the firm, and he answered “no” to this question, thereby knowingly providing false information to his firm, which caused its firm’s books and records to be inaccurate.

Ellis willfully failed to timely amend his Form U4 with material information.

Walter Allen Ellis (Principal): Fined $22,500; Suspended 1 year

Tags: Commodity Futures  

Bradford Alan Orosey
2008013087201/May 2010

Orosey willfully failed to disclose material information on his Form U4.

Bradford Alan Orosey: Barred

Scott Allan Henry
2008013969501/May 2010

Associated Person Henry willfully failed to disclose material information on his Form U4 and failed to respond to FINRA requests for information.

Scott Allan Henry: Barred

Aleksandr Yurievich Denisov (Principal)
AWC/2008014686502/April 2010

Denisov failed to timely amend his Form U4 to disclose material facts.

Aleksandr Yurievich Denisov (Principal): Fined $5,000; Suspended 30 business days

Denis William Kraemer Jr.
2006006192901/April 2010

The NAC imposed the sanctions following appeal of an Office of Hearing Officers (OHO) decision. The sanctions were based on findings that Kraemer willfully failed to disclose material information on his Forms U4.

Denis William Kraemer Jr.: Fined $5,000; Suspended 9 months

Freddy Vazquez
2008012721801/April 2010

Associated Person Vazquez willfully failed to disclose material information on his Form U4.

Freddy Vazquez: Fined $10,000; Suspended 6 months

Gary Ben Miner
AWC/2008014957101/April 2010

Miner willfully misrepresented material facts on a Form U4 that he submitted, or caused to be submitted, through his member firm.

Gary Ben Miner: Fined $5,000; Suspended 4 months

James Francis Cottrell
AWC/2009019257401/April 2010

Cottrell willfully failed to disclose a material fact on his Form U4.

James Francis Cottrell : Fined $5,000; Suspended 3 months

Michael Madden
AWC/2009016864001/April 2010

Associated Person Madden willfully failed to disclose a material fact on a Form U4 and failed to respond to FINRA requests for information.

Michael Madden: Barred

Morgan Keegan & Company, Inc.
AWC/2008014567501/April 2010

The Firm failed to timely file amendments to Uniform Applications for Securities Industry Registration or Transfer (Forms U4) and failed to timely file Uniform Termination Notices for Securities Industry Registration (Forms U5).

Morgan Keegan & Company, Inc. : Censured; Fined $75,000

Patrick John Heatley
2008012122001/April 2010

The Office of Hearing Officers (OHO) imposed the sanctions following a remand of the Default Decision. The sanctions were based on findings that Heatley failed to disclose material information on his Form U4.

Patrick John Heatley: Fined $5,000; Suspended 3 months

Warren William Wall (Principal)
2007009472201/April 2010

Wall willfully filed a false, inaccurate and misleading Form U5 regarding a registered representative’s termination.

Warren William Wall (Principal): Fined $15,000; Suspended 3 months in all capacities; Suspended 9 months in Principal capacity only; Ordered to requalify by examination before he re-enters the securities industry in any principal capacity.

E*Trade Securities LLC
AWC/2008011727801/March 2010

The Firm failed to timely report customer complaints to FINRA, and to accurately report information regarding the complaints.The firm failed to timely and accurately report statistical and summary information for written customer complaints to FINRA.

E*Trade Securities LLC: Censured; Fined $110,000

Fifth Third Securities, Inc.
AWC/2008011703401/March 2010

The Firm  failed to timely

• amend Uniform Applications for Securities Industry Registration or Transfer (Forms U4) to disclose registered representatives’ liens and bankruptcies,
  
• submit amended Uniform Termination Notices for Securities Industry Registration (Forms U5) to report investment-related complaints against registered representatives, and
  
• file FINRA Rule 3070 reports with FINRA.
  

Fifth Third Securities, Inc.: Censured; Fined $25,000

Juan Gustavo Espinoza
AWC/2009016491301/March 2010

Espinoza willfully made false statements with respect to disclosing material facts on his Form U4.

Juan Gustavo Espinoza : Fined $5,000; Suspended 6 months

Marc Jay Sitzer
AWC/2008012375801/March 2010

Marc Jay Sitzer willfully failed to disclose material facts on a Form U4.

Marc Jay Sitzer: Fined $5,000; Suspended 3 months

Odias Albert Bachelder II
AWC/2009017277501/March 2010

Registered Principal,  willfully failed to disclose material facts on his Form U4.

Odias Albert Bachelder II : Fined $5,000; Suspended 3 months in all capacities

Reginald Jenkins
2008013113401)/March 2010

Associated Person Jenkins failed to disclose material information on his Form U4 and failed to respond to FINRA requests for information.

Reginald Jenkins : Barred

Christopher James Naylor
AWC/2009017553401/February 2010

Associated Person Naylor willfully failed to disclose material information on his Form U4.

Christopher James Naylor: Fined $5,000; Suspended 6 months

Cory Holt McNabb
2007009139501/February 2010

Associated Person McNabb willfully failed to disclose material information on his Form U4 and failed to respond to FINRA requests for information.

Cory Holt McNabb: Barred

Hudson Etienne Sr
AWC/2008015957201/February 2010

Etienne misrepresented facts to an elderly customer who gave him $100,000 to invest in a Real Estate Investment Trust Investment Account purportedly through Etienne’s personal business, when no such security investment existed. Etienne used the customer’s funds for his personal expenses while providing the customer with monthly account statements that falsely indicated that her funds had been invested. Etienne provided the customer with a one-time payment of $22,000, purportedly representing interest earned on the investment. Etienne willfully failed to disclose material facts on his Form U4.

Hudson Etienne Sr: Barred

Tags: Elderly  

Philip Wade Dennis
2007011826401/February 2010

Associated Person Dennis failed to disclose material information on his Form U4; and failed to appear for a FINRA on-the-record interview.

Philip Wade Dennis: Barred

Ramon Oller
AWC/2008013628501/February 2010

Oller willfully omitted to disclose material facts on his Form U4.

Ramon Oller: Fined $5,000; Suspended 6 months

Vincent Dominic Bentivegna
AWC/2008014936401/February 2010

Bentivegna failed to timely amend his Forms U4 to disclose material information.

Vincent Dominic Bentivegna: Fined $2,500; Suspended 20 business days

Westrock Advisors, Inc.
AWC/2007008162201/February 2010

The Firm failed to file required attestations that it adopted and implemented written supervisory procedures reasonably designed to ensure that the firm and its employees complied with provisions of NASD Rule 2711(i) governing research analysts and research reports. The Firm failed to adequately supervise its research analysts, including supervising communications between the research analysts and subject companies, and documenting its monitoring of trading in research analysts’ brokerage accounts. The Firm issued research reports that failed to accurately disclose material facts.

The Firm allowed its research analysts to use third-party email systems but did not reasonably enforce a system to audit or review their email correspondence.

The Firm permitted an individual registered as a General Securities Principal and General Securities Representative to supervise the conduct of its research analysts without passing either the Series 16 Supervisory Analyst or the Series 87 Research Analyst exams as FINRA rules required.

The Firm failed to develop and implement an AML program reasonably designed to achieve and monitor its compliance with the requirements of the Bank Secrecy Act and the implementing regulations thereunder; the firm’s AML program had inadequate procedures governing the testing of its AML program; and the firm’s testing of its AML procedures was inadequate and not independent one year, and not tested another year.

The Firm failed to timely report statistical and summary information regarding customer complaints and failed to amend, timely amend or ensure the amendment of Uniform Applications for Securities Industry Registration or Transfer (Forms U4) or Uniform Termination Notices for Securities Industry Registration (Forms U5) to disclose customer complaints and their resolution.

The Firm failed to retain originals of certain incoming and outgoing written correspondence relating to its business, received by mail and by fax,or copies of such correspondence and failed to adequately enforce written supervisory procedures prohibiting firm personnel from using third-party, non-firm email accounts for firm business.

Westrock Advisors, Inc.: Censured; Fined $100,000

Tags: Supervision  WSP  AML  Email  Unregistered Supervisor  

Cutler Group L.P.
OS/09-ARCA-12/January 2010

Cutler Group L.P., an NYSE Arca Options trading permit holder, failed to

• preserve certain electronic communications in the required format;
• maintain a complete and accurate list of accounts in which its employees had a direct or indirect financial interest;
• obtain, maintain and review monthly account statements for accounts in which its employees had a direct or indirect financial interest;
• file a complete and accurate annual acknowledgment attestation with the exchange;
• appropriately conduct background checks of its associated persons; and
• establish, maintain, and/or enforce appropriate written policies and procedures for supervision and control, including a separate system of follow-up and review, with respect to certain of the foregoing areas.

The NYSE found the following violations:

• Section 17(a)(1) of Exchange Act, and Rules 17a-4(b)(4) and 17a-4(f) thereunder, and NYSE Arca Options Rule 11.16(a) by failing to preserve business-related e-mail and instant messages in non-rewriteable, non-erasable format, and by failing to preserve business-related fax communications
• NYSE Arca Options Rule 11.3—Commentary .03 by failing to maintain complete and accurate list of accounts in which employees had direct or indirect financial interest, and by failing to obtain, maintain and review monthly account statements for accounts in which employees had direct or indirect financial interest;
• NYSE Arca Options Rule 11.3(a) by failing to establish, maintain, or enforce adequate written policies and procedures reasonably designed to prevent misuse of material, non-public information by employees;
• Section 17(a)(1) of Exchange Act, and Rule 17a-3(a)(12) thereunder, and NYSE Arca Options Rule 11.16(a), by failing to appropriately conduct and document background checks of employees prior to employment, and by failing to properly retain and preserve manually signed Forms U-4;
• NYSE Arca Options Rule 11.18 by failing to establish, maintain, and/or enforce appropriate written policies and procedures for supervision and control, including separate system of follow-up and review, in following areas:
  • (a) conducting and documenting background checks of employees prior to employment, including maintaining complete and accurate signed Forms U-4;
  • (b) retention in proper format and review of business-related e-mails, instant messages and faxes sent or received by employees; and
  • (c) prevention of misuse of material, non-public information by employees .

Cutler Group L.P.: Censure; $20,000 Fine

Tags: Electronic Communications  Outside Accounts  Email  Background  

Darren Kai Yun Lee
AWC/2008016450001/January 2010

Associated Person Lee willfully made false statements with respect to material facts on his Form U4 and failed to respond to FINRA requests for information.

Darren Kai Yun Lee: Fined $5,000; Suspended 2 years

Tags: Willfully  

James Edward Smalley
2008012666801/January 2010

Associated Person Smalley failed to respond to FINRA requests for information and willfully failed to disclose material facts on his Form U4.

Tags: Willfully  

Kevin Patrick Brennan
AWC/2007007358604/January 2010

Registered Principal Brennan failed to reasonably supervise and respond to warning signs that registered representatives were conducting and operating a securities business from an unregistered branch office without supervision. The representatives

• improperly solicited potential customers by telephone in connection with the offer of securities,
• made false representations, including unwarranted price predictions,
• omitted material facts, and
• used misleading telemarketing scripts that a registered principal had not approved.

Brennan failed to timely amend his Uniform Application for Securities Industry Registration or Transfer (Form U4) to disclose material information.

Kevin Patrick Brennan: Fined $15,000; Suspended 6 months in Principal capacity only; Undertakes to cooperate with any and all FINRA investigations

Tags: Supervision  Unregistered Office  Scripts  Telemarketing  

Ralph Matthew Shino
E3A2005003702/January 2010

Registered Principal Shino failed to file, or timely file, NASD Rule 3070 reports and amendments to Forms U4 and U5. Shino permitted a branch office with more than three representatives to transact an options business without having a registered options principal or limited principal–general securities sales supervisor as the principal office supervisor.

Ralph Matthew Shino: Suspended 9 months in Principal capacity only for late filing and failing to file NASD Rule 3070 reports and amendments to Forms U4 and Uniform Termination Notices for Securities Industry Registration (Forms U5); Suspended an additional suspension 3 months in Principal capacity only for permitting a branch office to operate without a principal. Suspensions to run consecutively.

Tags: Unregistered Principal    

TIAA-CREF Individual & Institutional Services, LLC
AWC/2007011343301/January 2010

The Firm failed to

• report quarterly statistical and summary information to FINRA regarding a substantial number of customer complaints;
• establish,maintain and enforce a supervisory system reasonably designed to identify, capture, analyze and report customer complaints that are required to be reported pursuant to NASD Rule 3070(c);
• put adequate systems and procedures in place to ensure that all customer complaints were identified and forwarded to the appropriate firm personnel,
• adequately train all personnel who might potentially receive customer complaints regarding proper handling of complaints, and
• ensure that sufficient guidance was given to personnel who were responsible for reviewing complaints to determine which complaints were reportable.

TIAA-CREF Individual & Institutional Services, LLC: Censured; Fined $100,000

Tags: Supervisory System