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.
Joseph John Giuliano (Principal) AWC/2009019382101/December 2011
An individual who
subsequently became a trader with Giuliano's member firm provided
$250,000 to the firmís
parent company, without loan documentation or written agreement,
either as funds to be
traded in a firm proprietary account or be held as a security
deposit to insure the brokerdealer
against trading losses the individual might incur. Giuliano,
an owner of at least a 40-percent stake in the parent company and
the firmís chief financial
officer (CFO) and FINOP, caused the funds to be deposited into the
checking account and used some or all of the funds, without the
individualís consent or
authorization, to pay various expenses and debts of the parent
company and the firm,
thereby misusing the funds.
Kang made loans totaling at least $294,000 to a firm customer who was also a close personal friend. The loans were in the form of cash and checks to the customer and undertaken to assist the customer in meeting her business obligations.
Although the customer had signed promissory notes, she died and Kang has not been fully repaid. At the time she made the loans, Kang was aware that her member firm did not permit loans from or to customers unless they were immediate family members; however, Kang did not obtain pre-approval from her firm prior to lending monies to the customer, nor did she otherwise inform the firm of the loans.
Lyndall Conway Medearis Jr. (Principal) AWC/2008014825001/January 2011
Medearis became an additional credit card holder on a customerís credit card accounts which were revolving lines of credit. Medearis made charges to the cards totaling approximately $134,000, effectively borrowing this amount through the credit card transactions, and subsequently made payments to cover the charges.
Medearisí member firmís written procedures prohibited registered representatives from borrowing money from or loaning money to customers unless the customer was a member of the registered representativeís immediate family and the registered representative had requested and received prior written permission from the firm. Medearis borrowed an additional $132,000 from the customer in separate transactions, and Medearis never informed his firm.
Medearis loaned $6,420.33 to a customer who was a member of his immediate family but failed to obtain the firmís prior written permission before entering into the loan arrangement with the customer.
Lyndall Conway Medearis Jr. (Principal): Fined $10,000; Suspended 90 days
An interesting aspect of a recent SEC Order is its treatment of the information provided by multiple Claimants as constituting the conduct of a single whistleblower. In the Matter of the Claims for Award in Connection with Notice of Covered Action [Redacted][Redacted] (Order Determining Whistleblower Award Claims, '34 Act Rel. No. 87544; ... Read On