Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
CASES OF NOTE
2010
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.
December 2010
Gregory Lee Oldham
AWC/2009016709017/December 2010
Oldham participated in sales totaling $403,000 worth of ULPs to members of the public and failed to provide his member firm with prior written notice of the sales and failed to obtain his firmís written approval. He received approximately $17,610 in commissions.
Gregory Lee Oldham: No fine in light of financial status; Suspended 5 months
Tags:  Universal Lease Programs     |    In: Cases of Note : FINRA
Kelly Lee Flaherty
AWC/2009016709016/December 2010
Flaherty participated in the sales of Universal Lease Programs (ULPs), which totaled $140,429.75, and prior to the sales, he failed to provide his member firm with written notice about the sales and failed to obtain his firmís written approval. Flaherty received $15,980.87 in commissions, which were paid to an entity established for his annuities and insurance business.
Kelly Lee Flaherty: FIned $21,000 (includes disgorgement of commissions); Suspended 4 months
Tags:  Universal Lease Programs     |    In: Cases of Note : FINRA
Bill Singer's Comment
2010 seemed like a banner year for enforcement actions involving ULPs.
Randall Allen Gissendaner
AWC/2009016709013/December 2010

Gissendaner engaged in private securities transactions when he sold ULPs in various resort properties to investors. Gissendaner participated in a sale of a total of $172,989.23 worth of ULPs to investors and received approximately $15,380 in commissions from the sales. Prior to participating in these sales, Gissendaner failed to provide his member firm with written notice of the sales of ULP products, and failed to obtain the firmís written approval. Gissendaner completed his firmís Outside Business Activities/Private Securities Transactions form, and submitted his firmís Annual Compliance Questionnaire and stated that he had no outside business activities or private securities transactions to report, and that he had not engaged in any private securities transactions while associated with the firm.

FINRA found that Gissendaner also falsely answered ďNoĒ when he was asked whether he accepted compensation from any person or entity that was not a firm-approved arrangement or that was not disclosed on his Outside Business Activities Questionnaire.

Randall Allen Gissendaner : Fined $20,500 (includes disgorgement of commissions); Suspended 5 months
Tags:  Universal Lease Programs     |    In: Cases of Note : FINRA
Robert Lee Yingling
AWC/2009016709014/December 2010
Yingling participated in a sale totaling $45,118.25 worth of  Universal Lease Programs to members of the public, and failed to provide his member firm with written notice about the sales and failed to obtain his firmís written approval. Yingling received approximately $2,099.91 in commissions from the sales of ULPs.
Robert Lee Yingling: Fined $7,500 (includes commissions disgorgement); Suspended 15 business days
Tags:  Universal Lease Programs     |    In: Cases of Note : FINRA
Rodney Brian Moss
AWC/2009016709015/December 2010

Moss participated in the sale of $50,000 worth of Universal Lease Programs (ULPs) without prior written notice about the sale to his member firm and his firmís prior written approval.  He earned approximately $6,000 in commissions from his sale of the ULP.

Moss participated in sales of

  • payphone programs totaling $65,000,
  • an automatic teller machine (ATM) program totaling $48,000 with an additional $2,400 for surety bonds

to members of the public and failed to provide his firm with written notice about the sales and never obtained the firmís written approval.

Moss initialed and signed business activity statements in which he agreed that he was aware that his firm must be notified of all his business activities, even those that did not relate to the securities industry; these statements were incomplete and misleading because Moss failed to disclose his participation in the sales of the ULP, the payphone program and the ATM program.

Rodney Brian Moss: Fined $11,000 (includes commission disgorgement); Suspended 5 months
Tags:  ATM    payphones    Universal Lease Programs     |    In: Cases of Note : FINRA
Bill Singer's Comment
Yet another ULP action for 2010 -- certainly a growth industry for FINRA this year.
Ronald Laverne Kersey
AWC/2009016709012/December 2010
Kersey engaged in private securities transactions when he sold securities in the form of ULPs in various resort properties to investors. Kersey participated in a sale of a total of $194,385.96 worth of ULPs to investors and received approximately $19,438.60 in commissions from the sales. Prior to participating in these sales, Kersey failed to provide his member firm with written notice of the sales of ULP products, and failed to obtain the firmís written approval.
Ronald Laverne Kersey: Fined $24,500 (includes disgorgement of commissions); Suspended 3 months
Tags:  Universal Lease Programs     |    In: Cases of Note : FINRA
November 2010
Conrad Lee Fitzwater
AWC/2009016709009/November 2010
Fitzwater participated in the sale of Universal Lease Programs (ULPs))without prior written notice to, and prior written approval from, his member firm, and received approximately $2,000 in commissions from the sale of ULPs. Fitzwater submitted an outside business activities disclosure form to his member firm that failed to report that he intended to engage in the sale of ULPs.
Conrad Lee Fitzwater : Fined $7,000 (includes commissions disgorgement); Suspended 4 months
Tags:  Universal Lease Programs     |    In: Cases of Note : FINRA
Corbett Leo Hankins Jr.
OS/2009016709002/November 2010
Hankins sold interests in ULPs to members of the public and failed to provide prior written notice to, and obtain prior written approval from, his member firm. Hankins failed to timely respond to FINRA requests for information and documents.
Corbett Leo Hankins Jr.: Fined $15,500; Suspended 8 months
Tags:  Universal Lease Programs     |    In: Cases of Note : FINRA
Dwayne Howard Kappell
AWC/2009016709005/November 2010
Kappell sold interests in ULPs to members of the public and failed to provide prior written notice to, and obtain prior written approval from, his member firm. Kappell received approximately $14,733.03 in commissions from the sales.
Dwayne Howard Kappell : Fined $20,000 (including commissions disgorgement); Suspended 3 months
Tags:  Universal Lease Programs     |    In: Cases of Note : FINRA
Harold Dean Malicoat Jr.
AWC/2007009342201/November 2010
Malicoat participated in the sale of ULPs to members of the public and failed to provide prior written notice to, and obtain prior approval from, his member firms.
Harold Dean Malicoat Jr. : Fined $38,500 including $86,004.50 in commissions minus his payment to ivestors of $52,500; Suspended 1 year
Tags:  Universal Lease Programs     |    In: Cases of Note : FINRA
Jerry Allen Smith
AWC/2009016709006/November 2010
Smith participated in the sale of ULPs to members of the public without prior written notice to, or written approval from, his member firms. Smith received approximately $10,311.36 in commissions from the sales.
Jerry Allen Smith : Fined $15,500 including commissions disgorgement; Suspended 3 months
Tags:  Universal Lease Programs     |    In: Cases of Note : FINRA
Roger Howard Garrett (Principal)
AWC/2009016709008/November 2010
Garrett participated in the sale of ULPs without prior written notice to, and prior written approval from, his member firm, and received approximately $4,000 in commissions from the sale of ULPs. Garrett submitted an outside business activities questionnaire to his member firm that contained statements that he had not engaged in outside business activities, which was false.
Roger Howard Garrett (Principal): Fined $9,000 (including commissions disgorgement); Suspended 4 months
Tags:  Universal Lease Programs     |    In: Cases of Note : FINRA
Ronald Arthur Knight (Principal)
AWC/2009016709007/November 2010
Knight sold interests in ULPs to members of the public and failed to provide his member firm with prior written notice about the sales and failed to obtain the firmís prior approval. Knight participated in the sales despite his member firm denying his request and received approximately $30,270 in commissions from the sales. Knight completed a firm questionnaire containing statements that he had not engaged in any outside business activities, which was false.
Ronald Arthur Knight (Principal): Barred
September 2010
Gregory Earl Hafen (Principal)
AWC/2009016709011/September 2010
Hafen participated in the sales of Universal Lease Programs (ULPs) to members of the public totaling $482,015.64 and failed to provide his member firm with written notice and obtain the firmís written approval. Hafen received approximately $42,960 in commissions from ULP sales.Hafen submitted an outside business activities questionnaire to his firm that failed to report that he was selling ULPs for compensation.
Gregory Earl Hafen (Principal): Fined $48,000 including disgorgement of commissions; Suspended 7 months
Tags:  Universal Lease Programs     |    In: Cases of Note : FINRA
January 2010
David Nelson Cherry
AWC/2009016709003/January 2010
Cherry participated in the sale of Universal Lease Programs (ULPs) to public customers, received $32,495.76 in commissions, and failed to provide written notice to his member firms and obtain written approval from the firms to participate in private securities transactions. Cherry submitted an annual regulatory questionnaire to one of his member firm s that contained a statement that he had not sold or solicited any investment products or non-securities investment products, which was false.
David Nelson Cherry: Fined $37,500 (includes $32,495.76 in disgorgement of commissions); Suspended 7 months in all capacities
Tags:  Universal Lease Programs         |    In: Cases of Note : FINRA
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