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.
Clinton James Lewis (Principal) AWC/2009016863001/November 2010
Lewis was responsible for supervising a registered representative of his member firm and for reviewing the firmís receipt and forwarding of customer funds, but he failed to properly supervise the registered representative, who converted funds from customers. The registered representative wrote checks from his outside business that were made payable to the firm to fund investments for one of his customers. Lewis reviewed these checks and failed to ask the registered representative why his business was providing the funds for the customerís investments. Lewis failed to contact the customer to determine whether the amount invested was correct, which could have been detected and would have prevented the registered representativeís conversion of customer funds.
Clinton James Lewis (Principal): Fined $5,000; Suspended 10 business days in Principal capacity only with the exception that he may continue to act as an Options Principal
Darla Lanette Williams AWC/2009019338301/November 2010
Williams opened several accounts, including checking accounts with lines of credit and installment loans, under the names of retail bank customers, without their knowledge and authorization. Williams accessed these accounts and made unauthorized withdrawals totaling approximately $40,500, which she used for her benefit and personal use. Williams failed to respond to FINRA requests for information.
Fredric Henry Gardner AWC/2009020196301/November 2010
Gardner engaged in outside business activities by serving as the chief financial officer of a start-up company, and failed to provide prompt written notice to his member firm of any outside business activities and to obtain a designated firm principalís prior permission before accepting any position as officer or director of another entity, contrary to his firmís written policies and procedures. While serving as the start-up companyís chief financial officer, Gardner converted the entityís funds for his personal use by writing fraudulent checks without the entityís knowledge or permission. Gardner solicited and accepted $15,000 from an individual as an investment in the entity but converted the funds for his personal use.
REDACTED funded new customer checking accounts with his own money in order to open them. Then, REDACTED made online bill payments from each of the new accounts to credit card accounts in his name in order to qualify for incentive benefits from his firm and to reimburse himself for the initial deposits he made to open the accounts. REDACTED failed to respond to FINRA requests for information.
Philip Rene Deroziere (Principal) AWC/2009016976701/November 2010
Deroziere converted $10,000 from his member firm by endorsing and depositing a check made payable to the firm into his personal bank account without the firmís knowledge or permission. Deroziere also converted $750 from a nonsecurities customer by endorsing and depositing checks made payable to the customer into his personal bank account without the customerís knowledge or permission. Deroziere failed to respond to FINRA requests for information.
Michael Wayne Claiborne (Principal) AWC/2009017323101/October 2010
Claiborne asked a customer if he could borrow approximately $600 to pay for his travel expenses and the customer agreed, using his credit card to pay for the expenses. Claiborne failed to notify his member firm of the loan, which he repaid in full, and was contrary to his firmís procedures prohibiting registered representatives from borrowing money from customers.
Claiborne received a $1,000 check with the payee line left blank from the customer to deposit into the customerís Roth Individual Retirement Account (IRA) with the firm; Claiborne made the check payable to himself and deposited it into his personal checking account and used the proceeds for his own use and benefit, thereby converting the funds. Claiborne admitted to his supervisor that he had deposited the check into his own account and subsequently returned the funds to the customer.
An affiliated insurance company of Baldridge's member firm began an audit of her insurance files after receiving a customer complaint. The customer gave Baldridge a check as a payment for a premium for a new fire insurance policy and Baldridge admitted to auditors that she deposited the check into her personal checking account and used the money for her mortgage payment. As such, Baldridge converted the customer check for $1,340. Baldridge repaid the insurance company $1,340 on the day of the audit.
You work directly for a subsidiary but enter into an Employment/Non-Solicit Agreement with the parent. Things are fine until they're not. You leave. There is an allegation that you violated the non-solicit agreement. You get sued by the parent with whom you executed the agreement. What happens if the subsidiary lacks diversity jurisdiction in order to o... Read On