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.
October 2011
Frank Bianculli
AWC/2009016911202/October 2011

Bianculli entered into an informal agreement with brokers at his member firm to share in commissions relating to undisclosed private securities transactions in an entity, which purported to advance cash to merchants in exchange for the merchantsí future credit card receivable; the entity promised returns of 4 percent or more per month, but it was a Ponzi scheme.

Bianculli helped brokers with servicing a customerís investment but failed to provide his firm with written notice of his involvement in an unapproved private securities transaction. Bianculli provided false and misleading information to FINRA during sworn on-the-record testimony.

Also, Bianculli provided false and misleading statements to his firm in response to a compliance questionnaire distributed by the firm inquiring into the scheme. Bianculli denied meeting any of the owners or principals of the entity and failed to disclose his participation in the customerís investment.

Frank Bianculli : Barred
Tags:  Commissions    Ponzi     |    In: Cases of Note : FINRA
September 2011
James Leo Carroll
AWC/2009016911201/September 2011
Carroll invested approximately $100,000 of his own money in a Ponzi scheme from which he made a $25,000 profit; Carroll did not invest any customer funds in the Ponzi scheme. Carroll failed to disclose his private securities transaction to his member firm until after the Ponzi scheme collapsed and his firmís home office began investigating possible involvement of its registered representatives. Carroll engaged in outside business activities and failed to provide prompt written notice to his firm regarding his involvement.
James Leo Carroll : Fined $7,500; Suspended 30 days
Tags:  Ponzi     |    In: Cases of Note : FINRA
Bill Singer's Comment
This one's a bit of an oddball.  Carroll loses money in a Ponzi scheme and gets whacked for both private securities transactins and outside business activity violations. Talk about adding insult to injury!
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