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.
Bruce Benjamin Katz OS/2009018906501/January 2012
Katz borrowed a total
of $82,000 from a customer without obtaining his member firmís
prior written approval.
The findings stated that Katz assured the customer that he would
pay back her money.
Katz has not repaid the principal or any interest on the loans.
When Katz borrowed the
money, the customer was 75 years old and retired. At the
time Katz borrowed the money, his firmís WSPs did not allow the
borrowing and lending
of money between registered persons and firm customers unless the
customer was the
registered personís relative. Katz did not request or obtain the
firmís permission to borrow
money from the customer and was not related to the customer. Katz
was aware of the
firmís procedures and certified that he had received and read the
firmís written policies
and procedures regarding financial arrangements with clients. Katz
did not disclose to
his firm that he had obtained loans from the customer.Since the firmís
procedures did not permit borrowing, Katz could not borrow money
from the customer in
compliance with NASD Rule 2370, and the loans were not in
conformance with conditions
set forth in NASD Rule 2370(a)(2)(A)-(E) for permissible loans.
Bruce Benjamin Katz: No Fine in light of financial status; Suspended 18 months
As his member firmís president and chief supervisory officer, Allison he failed to adequately supervise a registered representative because he did not ensure that the representative was registered with a state before the representative conducted business with clients in the state.
Allison failed to adequately supervise another registered representative when he learned that her business had borrowed money from a customer. The firmís WSPs prohibit registered representatives from borrowing from customers. Allison did not properly follow up on this information; he did not ensure that the customer was repaid or examine the businessísbank statements to determine whether the representative had borrowed from additional customers. Even when Allison placed the representativeon heightened supervision, after learning of the loan from the customer, he did not begin conducting the quarterly audits the plan mandated until months later.
Daryl Eugene Allison (Principal): Fined $6,000; Suspended in Principal capacity only for 10 business days
David Vankuren Tolley AWC/2010022046801/January 2012
Tolley borrowed $5,000 from an investor and customer of his member firm
contrary to his firmís
compliance manual that generally prohibited representatives from
from a customer unless the borrowing was made pursuant to an
exception to the rule and
written approval had been granted by the firmís compliance
officer; Tolley failed to obtain
Tolley failed to timely amend
his Form U4 to disclose a
David Vankuren Tolley: Fined $7,500; Suspended 4 months
Naftali improperly borrowed a total
of $20,000 from two
elderly customers at his member firm. The loans were interest-free
and did not have any repayment terms. The firmís procedures
generally prohibited borrowing money from customers, except in
and those procedures required registered representatives to obtain
the firmís written
approval before entering into such loans. Naftali did not seek or
obtain the firmís approval
before entering into the loans. Naftali has since repaid one of
the customers in full, but still
owes the other customer $8,500.
Eytan Nisim Naftali : Fined $2,500; Suspended 45 days; Ordered to pay $8,500 plus interest in restitution to customer. FINRA took into account Naftali's suspension by his firm.
Joyce Ann Kauffmann (Principal) AWC/2011027218201/January 2012
borrowed $25,000, evidenced by a promissory note, from her
customer at her member firm.
The findings stated that when the borrowing occurred, the firm
to borrow money from a customer under specified conditions subject
to the representative
obtaining their immediate supervisorís prior written approval.
Kauffmann did not seek
firm approval for the borrowing, did not obtain its prior written
approval to borrow money
from the customer and did not disclose to the firm that she had
borrowed money from a
Kauffmann failed to
provide FINRA with requested
information and documents, and failed to appear to testify.
This couple received checks totaling
$55,180.29 from a customer to
be applied to the couple's mortgage and were intended as loans,
without notifying their
respective firms of the loans and without obtaining approval to
receive the loans. The couple'sí firms had policies and procedures
that generally prohibited
lending arrangements between the firmsí representatives and
customers, with certain
exceptions. Those exceptions did not apply to the loans between
the customer and the couple's. The firms required that a representative receive
pre-approval for any lending
arrangement between the representative and a customer of the
firms. The couple's have not repaid the loans.
X: No fine in light of financial status; Suspended 3 months
Y: No fine in light of financial status; Suspended 3 months
registered with her member firm, Bowenís company borrowed $25,000
from an individual
who was not her firmís customer. Thereafter, the entire $25,000
due to the individual was rolled over into a new loan agreement,
which was entered into
after the individual became Bowenís customer at her firm. The firmís WSPs do not allow a registered representative to borrow
from a customer. The
findings also included that Bowenís company paid off the loan.
Toni Leynett Bowen: No Fine in light of financial status; Suspended 10 business days
This is an update of Federal Appeals Court Reverses PCAOB And SEC Over Denial Of Ernst & Young Expert Witness (BrokeAndBroker.com Blog, April 3, 2018) http://www.brokeandbroker.com/3903/laccetti-pcaob-sec/You know when you read something that's "official" and, at first blush, it doesn't make sense? Of course, you figure you must have... Read On