Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
CASES OF NOTE
2011
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.
April 2011
Daniel A. Contreras (Principal)
AWC/2009018398701/April 2011

Contreras engaged in private securities transactions by recommending that customers invest in promissory notes, which were not approved investments of his member firm. Contreras failed to provide written notice to his firm describing in detail the proposed transactions and his proposed role therein, and stating whether he had received, or might receive, selling compensation in connection with the transactions.

The company that issued the promissory notes filed for Chapter 13 Bankruptcy, and all of Contrerasí customers lost their entire investment.

Contreras borrowed approximately $65,000 from his customers, contrary to his firmís written procedures prohibiting registered representatives from borrowing money or securities from any prospects or customers, including non-firm prospects/customers, and Contreras failed to pay back any of the money he borrowed.

Contreras failed to respond to FINRA requests for information and testimony.

Daniel A. Contreras (Principal): Barred
Tags:  Borrowing    Bankruptcy    Private Securities Transaction     |    In: Cases of Note : FINRA
Bill Singer's Comment
An all too typical scenario involving private securities transactions and borrowing from clients. A lot of folks are surprised when they learn how often those two factors go hand in hand.  Of course, an equally common factor is that an RR who fails to pay back customers from whom he borrowed money, also tends not to respond to FINRA requests for information and testimony.
January 2011
Kirk Alan Tessendorf
AWC/2009018272001/January 2011
Tessendorf willfully failed to disclose material information on his Form U4. The findings stated that during firm inclusive producer interviews and on compliance surveys, Tessendorf falsely replied to questions when specifically asked whether he was subject to bankruptcies, liens, creditors, etc., despite acknowledging on the surveys that he had an obligation to keep his Form U4 current with regard to judgments and liens.
Kirk Alan Tessendorf: Fined $5,000; Suspended 9 months
Tags:  Bankruptcy     |    In: Cases of Note : FINRA
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