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.
Henjum guaranteed a customer against trading losses without the customer’s or his member firm’s prior written authorization. Henjum reimbursed the customer approximately $19,200 from his personal funds for trading losses incurred.
James Frederick Henjum: Fined $5,000; Suspended 20 business days
In connection with the sale of an annuity contract, Rutherford misrepresented to a customer that he would receive a higher return rate than what the terms of the policy offered. Rutherford provided the customer with falsified annual account statements and an altered annuity contract that reflected a higher return rate, when in fact the customer was receiving a lower rate of return. Rutherford falsified an annual account statement by increasing the account balance by over $5,000 in order to mislead the customer into believing that he received additional earnings as a result of the higher rate of return, and deposited over $5,000 of her own personal funds into the customer’s account to compensate him for the disparity in return rates.
After agreeing to reimburse another customer for any early withdrawal penalties in connection with transferring money to his annuity, Rutherford falsified an annuity confirmation statement wherein the account balance was increased to cover a surrender charge that had not been credited after the customer complained that he was charged a penalty for early withdrawal.
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.
Daeger attempted to settle a customer complaint by making a $1,500 deposit into the customer’s bank checking account without his member firm’s knowledge or consent.
Jason Jude Daeger: Fined $5,000; Suspended 10 business days
Foreman settled a customer complaint away from his member firm without the firm’s knowledge or involvement in the settlement, and Foreman also guaranteed the customer against loss.
Sam Aubrey Foreman Jr.: Fined $10,000; Suspended 30 business days
Hill issued checks totaling $479,450 from customer accounts to corporate payees representing that he was purchasing race horses for the customers; but, instead, converted $350,000 to his own use by arranging for the corporate payees to issue checks made payable to him for the same dollar amounts, less a small administrative fee. Also, Hill settled a customer complaint for $12,000 and failed to inform his member firm about the complaint.
Jones engaged in excessive and unsuitable trading in customers’ accounts. Also, Jones settled a customer complaint for $1,600 without his employers’ knowledge or consent.
Steven Jones (Principal): Fined $7,500; Suspended 18 months; Ordered to pay $70,106.90, plus interest, in restitution to customers.
Berteletti created a false and misleading account summary and provided it to a customer, and failed to respond to FINRA requests for information. Berteletti engaged in securities transactions in a customer’s account without the customer’s authorization and consent, and without discretionary authority. Berteletti settled a customer complaint away from his member firm.
Jensen paid $18,000 to another firm’s trader and the trader’s relative so that the trader would continue to conduct his firm’s securities transactions through its account with Jensen. Also, while serving as the registered representative of record on a customer’s corporate account, Jensen shared in losses and gains in the account without written authorization from his member firm or the customer, and he did not share in the profits and losses in direct proportion to his financial contributions to the account.
Patrick James Jensen: No fine in light of financial status; Suspended 1 year
Sirota attempted to settle a customer complaint by sending the customer a check and a letter for her to sign retracting the complaint, without providing prior notice to his member firm or obtaining the firm’s consent.
Ronald Harris Sirota (Principal): Fined $5,000; Suspended 10 business days
Without permission or authorization from his member firm, he paid $29,000 to public customers in an attempt to prevent them from filing a complaint against him with his firm.
Lance Jeffrey Ziesemer (Registered Supervisor): Fined $5,000; Suspended 20 business days 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