NOTE:  Stipulation of Facts 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 and to the entry of findings.

2006
Forms U4, U5, and RE-3 and Rule 3070 Reports

Also see the Statutory Disqualification Index

 

David Phillip Zipkin
AWC/#20050022099-01/December 2006

Zipkin failed to amend his Form U4 to disclose material information; and failed to appear for an NASD on-the-record interview. 

David Phillip Zipkin: Barred.

Chad Marion David Stephenson
AWC/#20050022243-01/December 2006

Stephenson willfully failed to disclose material information on his Form U4. 

Chad Marion David Stephenson: Fined $10,000; Suspended 1 year in all capacities.

Christopher John Rocco Santanelli 
AWC/#ELI2004036401/December 2006

Santanelli failed to complete an NASD on-the-record interview and failed to respond to NASD requests for information. Also, hei failed to amend his Form U4 to disclose material facts, and engaged in a pattern of trading activity in public customers’ accounts that was excessive in light of the customers’ objectives, financial situations and needs. 

Christopher John Rocco Santanelli : Barred

James Andrew Moon 
AWC/#2005002671801/December 2006

Moon failed to disclose material information on his Form U4. 

James Andrew Moon : Fined $5,000; Suspended 3 months in all capacities

Dan K. Ly  
AWC/#2005003477201/December 2006

Ly misrepresented a material fact on his Form U4.

Dan K. Ly : Fined $5,000; Suspended 45 days in all capacities

Sandeep David Kitson (Principal) and Gurpreet Singh Sabharwal (Principal)
OS/#E102003128802/December 2006

Kitson and Sabharwal participated in private securities transactions without providing prior written notice to, or obtaining approval from, their member firm. They willfully failed to disclose material information on their Forms U4. 

Sandeep David Kitson: Barred

Gurpreet Singh Sabharwal: Fined $10,000; Suspended 6 months in all capacities

Tyjuan Deleon Jackson 
#2005003480801/December 2006

Jackson failed to disclose material information on his Form U4 and failed to respond to NASD requests for documents and information. 

Tyjuan Deleon Jackson : Barred

Jeremy Michael Chapman
#2005002166501/December 2006

Chapman failed to respond to NASD requests for information and willfully failed to disclose material information on his Uniform Application for Securities Industry Registration and Transfer (Form U4).

Jeremy Michael Chapman: Barred

Banc One Securities Corporation 
AWC/#E8A2005001601/December 2006

The Firm failed to timely file Uniform Termination Notices for Securities Industry Registration (Forms U5) with NASD for numerous individuals.

Banc One Securities Corporation : Censured; Fined $142,000

Lee Gerald Schroeder (Principal)
AWC/#20050026087-01/November 2006

Schroeder failed to 

  • disclose a material fact on his Form U4;  
  • timely respond to NASD requests for information; and 
  • appear for an NASD on-the-record interview. 

Lee Gerald Schroeder : Barred

Marqusia Shanti Melton 
#2005000725701/November 2006

Melton failed to respond to NASD requests for information and failed to disclose material information on her Form U4. 

Marqusia Shanti Melton : Barred

William Michael Kuether
AWC/#20050013765-01)/November 2006

Kuether willfully failed to disclose a material fact on his Form U4; failed to respond truthfully to an NASD request for information ;and failed to respond to subsequent requests for information.

William Michael Kuether: Barred

Wayne Jason Herman
AWC/#2006004713801/November 2006

Herman faiiled to amend his Form U4 to disclose material information. 

Wayne Jason Herman: Fined $5,000; Suspended 60 days in all capacities

John Alfred Elam, Jr. (Principal) 
#2005002600501/November 2006

Elam failed to respond to NASD requests for information and documents, and willfully failed to amend his Form U4 to disclose material information.  

John Alfred Elam, Jr. : Barred

Robert Lee Banks 
#2005000524901/November 2006

Banks failed to respond to NASD requests for information and he willfully failed to disclose material information on his Form U4. 

Robert Lee Banks : Barred

Morgan Keegan & Company, Inc. 
AWC/#2005002050701/November 2006

The Firm failed to timely file amendments to Uniform Applications for Securities Industry Registration or Transfer (Forms U4), and failed to timely file Forms U5 with NASD. 

Morgan Keegan & Company, Inc. : Censured; Fined $29,000

Fox & Company Investments, Inc. 
AWC/#E3A20050043-02/November 2006

The Firm failed to timely and accurately 

  • update the Uniform Termination Notice for Securities Industry Termination (Form U5) for former registered representatives for events that required regulatory disclosure; and
  • report municipal bond transactions to the MSRB

Also, the Firm erroneously made reports to the MSRB for transactions that did not actually occur, and failed to make and keep current order tickets for municipal securities transactions. The Firm failed to adopt and maintain written supervisory procedures reasonably designed to achieve compliance with MSRB rules. 

Fox & Company Investments, Inc. : Censured; Fined $25,000

Everett Haliburton Toms, Jr.
AWC/#2006005180501/October 2006

Toms willfully failed to disclose material information on his Form U4. 

Everett Haliburton Toms, Jr.: Fined $5,000; Suspended 6 months in all capacities

Gregory Lloyd Burdett (Principal)
AWC/#2006004208101/October 2006

Burdett willfully failed to disclose material information on his Form U4.

Gregory Lloyd Burdett : Barred

Bret Raab Bailey
AWC/#2006004274601/October 2006

Bailey failed to disclose material facts on his Uniform Application for Securities Industry Registration or Transfer (Form U4). 

Bret Raab Bailey: Fined $5,000; Suspended 1 year in all capacities.

Zelman Sanders, III 
#E8A2004086101/September 2006

Sanders failed to respond to NASD requests for informationm and failed to disclose material facts on his Form U4.

Zelman Sanders, III : Barred

Marcelo S. Samson
AWC/#20050031428-01/September 2006

Samson willfully failed to amend his Form U4 to disclose material facts; and he failed to respond to NASD requests for information.

Marcelo S. Samson: Barred

Fredd E. Montoya 
AWC/#2006004240801/September 2006

Montoya willfully failed to disclose material facts on his Form U4. 

Fredd E. Montoya : Barred

Jennifer Lynn Glowacki
#2005002369801/September 2006 

Glowacki failed to respond to NASD requests for information, and willfully failed to disclose material information on her Form U4.

Jennifer Lynn Glowacki: Barred

Frank Paul Eisele
AWC/#2005002670601/September 2006

Eisele willfully failed to disclose material information on his Form U4.

Frank Paul Eisele: Barred

Willie Lee Cotton, III
AWC/#2005001922601/September 2006

Cotton failed to timely amend his Form U4 to disclose material information. 

Willie Lee Cotton, III: Fined $5,000; Suspended 10 business days in all capacities

Nesil Caliskanalp
#20050015978-01/September 2006

Caliskanalp willfully failed to disclose material information on his Form U4. Caliskanalp failed to respond to NASD requests for information.

Nesil Caliskanalp: Barred

Commerce One Financial Inc.
AWC/#ELI2005000401/September 2006 

The Firm failed to timely 

  • file Uniform Termination Notices for Securities Industry Registration (Forms U5), and 
  • report statistical and summary information relating to customer complaints to NASD. 

Also, equity transactions the firm executed revealed that order tickets did not reflect the order entry time, were not maintained by the firm and did not reflect the order execution time.

Commerce One Financial Inc.: Censured; Fined $19,250

The Dratel Group, Inc. and William Marshall Dratel (Registered Principal) 
AWC/#2005001123301/September 2006

Acting through Dratel, the Firm failed to timely:

  • report statistical and summary information regarding a settlement with a public customer to NASD. 
  • amend Dratel’s Form U4 to disclose a material fact; and
  • obtain an opinion of counsel concerning a lawsuit asserting a claim that could have had a material impact on the firm’s net capital, failed to include the claim in the calculation of aggregate indebtedness and failed to timely notify the SEC or NASD of the deficiencies. 

The Dratel Group, Inc. and William Marshall Dratel:Censured; Fined $15,000 (jt/sev)

Sands Brothers & Co., Ltd. and Steven Brett Sands (Registered Principal) 
OS/# E102004106801/September 2007

Acting through Sands, the Firm 

  • failed to file a continuing membership application with NASD seeking approval for the transfer of customer accounts and registered representatives to another firm Sands had founded; and
  • permitted an individual to engage in the firm’s investment banking and securities business without the benefit of registration. 

Also, Sands failed to disclose a material fact on his Uniform Application for Securities Industry Registration or Transfer (Form U4). 

Sands Brothers & Co., Ltd.: Censured; Fined $150,000 ($100,000 of which jt/sev. with Steven Brett Sands) 

Steven Brett Sands: Fined $100,000 (jt. sev with Sands Bros); Suspended 60 days in principal capacity

Joseph Gerald Vitetta
OS/#E1020041225-01/August 2006

Vitetta made an unsuitable recommendation to a public customer that resulted in a large surrender charge and a forfeiture of a death benefit. The findings stated that Vietta misappropriated/misused $37,000 from a public customer. Vietta failed to disclose information on his Form U4. 

Joseph Gerald Vitetta: Ordered to pay $37,000 in restitution to public customer; Barred

Bryon Scott Key
OS/#2005002663801/August 2006

Key willfully failed to disclose material information on his Form U4. The findings stated that Key also failed to disclose his interest in a securities account to his member firm and to the firm carrying the account. The findings also stated that Key failed to respond to NASD requests for information and documents. 

Bryon Scott Key: Barred

Stephen William Godfrey
#E8A2004096901/August 2006 

Godfrey failed to amend his Form U4 to disclose material information. 

Stephen William Godfrey: Fined $5,000; Suspended 30 days in all capacities.

Dominick Anthony Burke (Principal)
AWC/#2006004760001/August 2006 

Burke willfully failed to disclose material information on his Form U4. 

Dominick Anthony Burke (Principal): Fined $5,000; Suspended 3 months in all capacities.

Alan Edmund Bartholemy, Jr.
AWC/#20050034152-01/August 2006 

Bartholemy willfully failed to amend his Uniform Application for Securities Industry Registration or Transfer (Form U4) to disclose material information. 

Alan Edmund Bartholemy, Jr.: Barred

PGP Financial, Inc. and Ellen Rose Lozinski (Principal) 
AWC/#ELI2005000631601/August 2006

Acting through Lozinski, the Firm 

  • operated a securities business without a properly registered financial and operations principal (FINOP);
  • failed to timely file the Uniform Termination Notice for Securities Industry Registration (Form U5) concerning a registered person within 30 days from the date of termination; and
  • conducted a securities business while failing to maintain its minimum net capital requirement.  

PGP Financial, Inc.: Censured; Fined $25,000 (jt/several with Lozinski)

Ellen Rose Lozinski (Principal): Fined $25,000 (jt/sev with PGP Financial); Suspended 10 business days in principal capacity

Joseph Edward Zeglowitsch, III 
#2005001533901/July 2006

Zeglowitsch willfully failed to disclose material information on his Form U4, and failed to respond to NASD requests for information. 

Joseph Edward Zeglowitsch, III: Barred

Daniel Tirado
#2005000224601/July 2006

Tirado willfully failed to disclose material information on his Form U4, and failed to respond to NASD requests for information. 

Daniel Tirado: Barred

David Lynn Robinson
#E8A20050009671/July 2006 

Robinson willfully failed to amend his Form U4 to disclose material facts, and failed to timely respond to NASD requests for information. 

David Lynn Robinson: Fined $10,000; Suspended 2 years in all capacities

Sergio Magana, Jr. 
AWC/#2005002079001/July 2006

Magana failed to disclose material information on his Form U4. The suspension in any capacity is in effect from July 3, 2006 through October 2, 2006. 

Sergio Magana, Jr. : Fined $5,000; Suspended 3 months in all capacities

Guang Lu 
#C9A20020052/July 2006

The U.S. Court of Appeals affirmed the sanction following the SEC decision upon review of the National Adjudicatory Council (NAC) decision. The sanction was based on findings that Lu used discretionary authority in a public customer’s account while failing to provide written notice to the executing member firm and failing to notify his member firm of his association with another member. Also, Lu failed to disclose material facts on his Form U4.

Guang Lu: Barred

Thomas Dean Bade (Principal)
#E3A2004034901/July 2006

Bade willfully failed to disclose material information on his Uniform Registration for Securities Industry Registration or Transfer (Form U4). 

Thomas Dean Bade: Barred

Gilford Securities, Inc. 
AWC/#E102002027301/July 2006

Order tickets for transactions the firm effected were inaccurately time stamped. Also,  the Firm failed to update, or timely update, former representatives’ Uniform Termination Notice for Securities Industry Registration Forms (Forms U5) to disclose material information. 

Gilford Securities, Inc.: Censured; Fined $12,500

Fordham Financial Management, Inc. and Harvey Joel Latzen (Principal) 
AWC/#E102005014702/July 2006

Acting through Latzen, the Firm failed to report statistical and summary information regarding customer complaints as NASD Rule 3070(c) required. 

Fordham Financial Management, Inc. and Harvey Joel Latzen: Censured and Fined $15,000 jointly/severally

Todd Russell Taskey 
AWC/#2005003668101/June 2006

Taskey willfully failed to disclose material facts on his Form U4. 

Todd Russell Taskey : Barred

San Sana Neal 
#E3B20040218-01/ June 2006

Neal willfully failed to disclose material information on his Form U4.

San Sana Neal : Barred

Bei Min Hong 
OS/#20050024340-01/June 2006

Hong willfully failed to disclose material information on her Form U4. Also, she failed to respond to NASD requests for information. 

Bei Min Hong : Barred

NatCity Investments, Inc. 
AWC/# E8A2005014401/June 2006

The Firm 

  • filed Uniform Termination Notices for Securities Industry Registration (Forms U5) late to NASD;
  • failed to timely amend Forms U4 to disclose customer complaints;
  • failed to maintain a system to supervise the activities of each registered representative and associated person that was reasonably designed to achieve compliance with applicable securities laws and regulations to ensure the timely filing of Forms U5 for individuals whose registrations were terminated, or the timely amending of Forms U4 for individuals with customer complaints. 

NatCity Investments, Inc. : Censured; Fined $123,500

Fixed Income Securities, LP 
AWC/#E3A20040016-01)/June 2006

The Firm 

  • permitted associated persons to engage in securities activities while their registration statuses were inactive due to their failure to complete the regulatory continuing education requirement
  • failed to report, and to timely report, customer complaints to NASD;
  • failed to amend, and to timely amend, Uniform Application for Securities Industry Registration or Transfer Forms (Forms U4); and 
  • failed to establish and implement a Customer Identification Program for investment advisors accounts and with certain other non-investment advisor customer accounts. 

Fixed Income Securities, LP : Censured; Fined $23,750

Andrew Sirico (Principal) 
OS/#ELI2003056602/May 2006

Sirico failed to disclose material information on his Form U4, and failed to timely respond to NASD requests for information. 

Andrew Sirico : Fined $10,000; Suspended 7 months in all capacities

Laurence Scott Newman
AWC/#2005000480401/May 2006 

Newman willfully failed to disclose a material fact on his Form U4. 

Laurence Scott Newman: Suspended 3 months in all capacities

Jerry Harold Jones
AWC/#20050017269-01/May 2006

Jones failed to timely amend his Form U4 to disclose material information. 

Jerry Harold Jones: Fined $2,500; Suspended 20 business days in all capacities

Thomas Mitchell Forbes
OS/#2005001829202/May 2006

Forbes willfully failed to disclose material information on his Form U4, and failed to respond to an NASD request for information. 

Thomas Mitchell Forbes: Barred

Peter Christian Dunne
OS/#ELI20040097/CLI050004/May 2006

Dunne effected, or caused to be effected, transactions in public customers’ accounts without their prior knowledge, authorization or consent. Also, he failed to amend his Uniform Application for Securities Registration or Transfer (Form U4) in a timely manner. 

Peter Christian Dunne: Fined $15,000; Suspended 90 days in all capacities

Cheryl Lynn Mize
AWC/#2005002369701/April 2006

Mize willfully failed to disclose material facts on her Form U4. She failed to respond to NASD requests for information and documents. 

Cheryl Lynn Mize: Barred

George Douglas Linicomn
OS/#E062004040001/April 2006 

Linicomn willfully failed to disclose a material fact on his Form U4.

George Douglas Linicomn: Barred.

Haim Aron Levy
#E1020040826-01/April 2006 

Levy failed to respond to NASD requests for information. Levy willfully failed to disclose material facts on his Form U4 and his employment application. 

Haim Aron Levy: Barred

Albert Douglas Lalonde
AWC/#2005000676501/April 2006 

Lalonde willfully failed to disclose material facts on his Form U4. 

Albert Douglas Lalonde: Fined $5,000; Suspended 6 months in all capacities

Kirlin Securities, Inc. 
AWC/#ELI20020057-01/April 2006

Kirlin Securities failed to amend Uniform Applications for Securities Industry Registration or Transfer (Forms U4) and Uniform Termination Notices for Securities Industry Registration (Forms U5) within 30 days after learning of the facts or circumstances giving rise to the amendment. The firm’s written supervisory procedures failed to address certain areas including books and records, net capital computations, clearing arrangement, corporate collateralized mortgage obligations (CMOs), margin accounts, branch office activities, equity trade reporting, corporate bond TRACE reporting and how documents will be evidenced for review. The firm failed to report transactions using the proper “.SLD” late trade modifier, and failed to report transactions to ACT within 90 seconds. 

Kirlin Securities, Inc.: Censured; Fined $15,000

Aaron Talamayan Ronquillo
AWC/#20050019363-01/March 2006

Ronquillo willfully failed to disclose material information on his Form U4. 

Aaron Talamayan Ronquillo: Barred

Clyde Nakaoka (Supervisor)
AWC/#2005002116901/March 2006 

Nakaoka willfully failed to amend his Form U4 to disclose a material fact. 

Clyde Nakaoka: Fined $5,000; Suspended 1 year in all capacities

Daniel Micaletti, Jr.
AWC/#2005001181101/March 2006

Micaletti willfully failed to disclose material information on his Form U4.

Daniel Micaletti, Jr.: Fined $5,000; Suspended 3 months in all capacities.

Chris Lamont Meacham (Principal) 
AWC/#20050017095-01/March 2006

Meacham failed to promptly amend his Form U4 to disclose material information. 

Chris Lamont Meacham: Fined $5,000; Suspended 10 business days in all capacities

James Daniel David 
AWC/#E3B2004023201/March 2006

David willfully misrepresented a material fact on a Form U4. 

James Daniel David: Fined $5,000; Suspended 3 months in all capacities

Marco Alfonsi (Principal) 
AWC/#E072004010401/March 2006

Alfonsi failed to 

  • establish and maintain a supervisory system and written supervisory procedures for his member firm that were reasonably designed to achieve compliance with the applicable securities laws, regulations and NASD rules; 
  • establish a system to ensure that the firm maintained 
    • correspondence
    • internal communications, 
    • complete customer complaint files, and
    • customer new account information; 
  • ensure that the firm filed customer complaints in a timely manner under NASD Rule 3070; and 
  • ensure that Forms U5 were timely amended. 

Marco Alfonsi: Fined $25,000; Suspended 1 year in all principal capacities.

State Farm VP Management Corp.
AWC/#E8A2005019201/March 2006

The firm failed to timely file a Form U5 for individuals whose registrations were terminated. The firm failed to establish and maintain a supervisory system that was reasonably designed to achieve compliance with respect to applicable securities laws and regulations, and NASD rules to ensure the timely filing of Forms U5. 

State Farm VP Mgmt: Censured; Fined $133,000

Nationwide Securities, Inc.
AWC/#E8A200540145/March 2006

Nationwide Securities filed Uniform Termination Notices for Securities Industry Registration (Form U5) late, and failed to timely amend Uniform Applications for Securities Industry Registration or Transfer (Forms U4) and Forms U5. The firm failed to prepare adequate written supervisory procedures associated with Forms U4 and U5 filing requirements, and failed to timely file 3070 reports

Nationwide Securities, Inc.: Censured; Fined $30,750

Doyle Mark White
OS/#CMS040048/February 2006

White manipulated the market for, and the price of, a company’s common stock. He engaged in a series of wash trades in the company’s stock at arbitrary and artificial prices, which were misleading to the investing public and market participants in that they gave the false appearance of market interest in the stock at the arbitrary prices White had created. White permitted an unregistered person to associate with a member firm. Also, White failed to notify member firms of his association with his member firm and failed to notify his member firm of his accounts at other member firms. Finally, he failed to update his Form U4 with material facts. 

Doyle Mark White: Barred

Douglas Alan Rauh (Principal)
#C02040044/February 2006

Rauh willfully failed to disclose material information on his Form U4. 

Also, Rauh exercised discretion in the public customers’ accounts without receiving their prior written authorization to exercise such discretionary power and without receiving his member firm’s acceptance of the discretionary account. He recommended and effected  unsuitable securities transactions in a public customer's account. Finally , while exercising control over a public customer's account, Rauh executed  unsuitable options trades 

Douglas Alan Rauh: Fined $118,405; Barred

Robert Patrick Naif 
#E0220030845-01/February 2006

Naif willfully failed to disclose material information on his Form U4. 

Robert Patrick Naif: Fined $10,000; Suspended 2 years in all capacities

Loren William Magill
OS/#E0220040228-03/February 2006

Magill willfully failed to disclose material facts on his Form U4. 

Loren William Magill: Fined $5,000; Suspended 9 months in all capacities.

Christopher Edward Gaddy
#C3A050038/February 2006

Gaddy willfully failed to disclose material information on his Form U4, and failed to respond to NASD requests for information. 

Christopher Edward Gaddy: Barred

John Dewayne Crist 
OS/#2005000741202/February 2006

Crist willfully failed to disclose material information on a Form U4. 

John Dewayne Crist: Fined $5,000; Suspended 6 months in all capacities

Daniel Castaneda 
AWC/#20050019101-01/February 2006

Castaneda willfully failed to disclose a material fact on his Form U4. 

Daniel Castaneda: Fined $5,000; Suspended 2 years in all capacities

Commonwealth Financial Network
AWC/E112004004301/February 2006

The Firm failed to file amendments to Uniform Applications for Securities Industry Registration or Transfer (Forms U4) and Forms U5 in a timely manner. The firm made inaccurate or late 3070 filings. The firm’s supervisory system and procedures were not reasonably designed to achieve compliance with its Article V, and with NASD rules concerning reporting obligations. 

Commonwealth Financial Network: Censured; Fined $100,000; Required to certify in writing, within 90 days, that it has reviewed its systems and procedures for complying with its Article V and NASD Conduct Rule 3070 reporting obligations, and that it has established systems and procedures reasonably designed to achieve compliance with the reporting requirements set forth therein

David H. Becerra
SFC/NYSE Hearing Panel 05-165/February 1, 2006

On or about March 30, 1995, Becerra was convicted of a misdemeanor for possession of a firearm and was sentenced to a one-year conditional discharge, the terms of which were satisfied in March 1996.

On June 11, 2001, Becerra applied for employment with H & R Block Financial Advisors (the "Firm") and filled out, among other things, an employment application.  The employment application asked: “Have you ever been convicted of a misdemeanor?” Becerra wrongly marked “No” in response to this question. The Firm terminated Becerra on August 6, 2001.

A NYSE Hearing Panel found that Becerra engaged in conduct inconsistent with just and equitable principles of trade in that he failed to disclose a misdemeanor conviction on an application for employment submitted to his member firm employer.

David H. Becerra: Censure; Barred for 2 years in all capacities

C.E. Unterberg, Towbin, LLC and Thomas Israel Unterberg (Principal)
AWC/#E1020030088-01/February 2006

C.E. Unterberg, Towbin, LLC untimely filed Uniform Termination Notices for Securities Industry Registration (Forms U5) with NASD. Acting through Unterberg, the firm permitted an individual to engage in activities that required registration as a General Securities Representative and General Securities Principal. 

C.E. Unterberg, Towbin, LLC: Censured; Fined $20,000 jointly and severally with Thomas Unterberg; Fined an additional $7,500

Thomas Israel Unterberg: Censured; Fined $20,000 jointly and severally with C.E. Unterberg, Towbin, LLC.

Michael Wang
AWC/20050019334-02/January 2006

Wang willfully failed to disclose a material fact on his Form U4. 

Michael Wang: Fined $10,000; Suspended 1 year in all capacities.

Bill Singer's Comment: Okay, I'll bite --- generally folks are charged with failing to disclose "material information," but here the charge is "a material fact."  Also, when one "willfully" fails to make a disclosure, that often results in a bar or a long suspension.  So . . . what's up with this case?  
Loyde K. Robinson
AWC/2005002504101/January 2006

Robinson willfully failed to disclose material information on his Form U4. 

Loyde K. Robinson: Barred

Daniel Morris Porter
C1020050041/January 2006

Porter willfully failed to disclose material information on his Form U4. 

Daniel Morris Porter: Barred

Mark Ray Davis (Registered Supervisor) 
AWC/E3A20040340-01/January 2006

Davis failed to amend his Form U4 with material information. 

Mark Ray Davis: Fined $3,500; Suspended 10 business days in all capacities

Thomas Hart Benton
AWC/2005001598701/January 2006

Benton failed to disclose material information on his Form U4. 

Thomas Hart Benton: Fined $5,000; Suspended 45 days in all capacities.

Joseph Gunnar & Co. L.L.C.
AWC/E102002034201/January 2006

In connection with a contingency private placement offering of securities, the Firm violated the escrow agreement in that amendments to the offerings were not compliant with  Rule 10b-9. When the minimum offering was reached pursuant to the amended offering documents, the funds were released from the escrow account to the issuer; however, the original escrow agreement had never been properly amended --- thus, pursuant to the escrow agreement in place, the funds were released early. 

The Firm amended the terms and conditions of a second offering to 

  • reduce the maximum from $2.3 million to $1.2 million (the minimum was $1 million), and 
  • extend the termination date from June 30 to July 19, 2002

However, the escrow agreement was not amended, so when the funds were disbursed to the issuer on July 23, 2002, in accordance with the terms of the amended offering, it was inconsistent with the terms of the escrow agreement, under which the funds should have been returned to the customers when the minimum had not been met by June 30. 

Also, the Firm failed to timely file or ensure the timely filing of amendments Forms U4 and U5 to report complaints received by the firm. In addition, while conducting a securities business, the firm failed to maintain the required minimum net capital required by SEC Rule 15c3-1. 

Joseph Gunnar & Co LLC: Censured; Fined $20,000

Bill Singer's Comment: Private Placements can be tricky and it's a good opportunity at the beginning of the new year to call your attention to a frequent source of aggravation.  Always keep in mind that these deals tend to have two basic documents:  1. The Offering Memorandum, and 2. The Escrow Agreement.  If you are amending the Offering Memo, make sure to read the Escrow Agreement, which will likely need to be changed too.  With Wall Street starting to see the resurgence of investment banking activity, this is one of those "checklist" items that a lot of folks used to remember to confirm but with the lack of deal activity the past few years they may have forgotten.
Leonard & Company  and James Sylvester Currier (Principal) 
AWC/E8A2003049501/January 2006

Acting through Currier, the Firm 

  • received customer complaint notices, arbitration claims and settlements that were subject to NASD reporting requirements, but failed to report these events to NASD; 
  • failed to timely file amendments to the Forms U4 and U5; and
  • failed to enforce its written supervisory procedures to ensure compliance with NASD rules. 

Leonard & Co: Censured; Fined $40,000

James Sylvester Currier: Fined $5,000; Suspended 10 business days in principal capacity; Required to requalify as Principal per Series 24

Bill Singer's Comment: And we have an early leader --- lapses in customer complaint reporting and U4/U5 amendments.  We discussed this trend in 2005 and it's clear that NASD is not kidding around.  Not only were there some $45,000 in fines imposed but a 10-day sitdown with a requal.  You all better make sure the paperwork is getting done.
Delta Asset Management Company, LLC and Adam Robert Goldstein (Principal)
AWC/E072003005104/January 2006

Acting through Goldstein, the Firm failed to 

  • establish, maintain, and enforce an adequate supervisory system that included written procedures reasonably designed to achieve compliance with industry rules and regulations related to sales practices;
  • ensure that disclosable events, such as customer complaints and securities related civil lawsuits and arbitration claims, were reported, or reported timely, through the Uniform Application of Securities Industry Registration (Form U4), the Uniform Termination Notices for Securities Industry Registration (Form U5) and amendments as appropriate;
  • report summary and statistical information for customer complaints (and reported some customer complaints late); and
  • develop and implement a written anti-money laundering program (AML) reasonably designed to achieve compliance with the requirements of the Bank Secrecy Act and the implementing regulations promulgated thereunder. 

Delta Asset Mgmt Co, LLC: Expelled

Adam Robert Goldstein: Fined $10,000; Suspended 2 years in principal/supervisory capacities

Bill Singer's Comment: Whoa!  A member firm gets expelled for this?  Supervisory system failures are fairly mundane.  Failures to report (or report timely) U4/U5s and customer complaints is also somewhat garden variety. Ditto for non-compliant AML programs.  So  . . . things were either much worse than NASD is letting us know, or there may be some other issues going on we aren't privy to.  Regardless, this is a stiff sanction.
Evelyn Billy Simpson
SFC/NYSE Hearing Panel 06-1/January 17, 2006

On April 12, 1989, Simpson was arrested by the Santa Ana, California Police Department and charged with Petty Theft, a misdemeanor. On May 9, 1989, Simpson was convicted in Orange County, California of Petty Theft and was sentenced to 13 days in jail and 12 months probation.  In addition, on March 20, 1989, Simpson was arrested by the Fountain Valley, California Police Department and charged with submitting False ID to a Peace Officer, a misdemeanor. On May 25, 1989, Simpson was convicted in Orange County, California of submitting False ID to a Peace Officer and was sentenced to nine days in jail.a former non-registered employee with , a member organization. 

Employment Application


On March 8, 2004, Simpson completed an application for employment at Citigroup Global Markets Inc. (the "Firm"). The application included a series of questions that asked Simpson about her criminal history. In this portion of the application, Simpson made certain misstatements:

  • answered “no” to a question that asked if she had ever been “arrested or indicted for any investments, an investment related business, fraud, false statements, omissions, wrongful taking of property, embezzlement, bribery, forgery, counterfeiting, extortion, or a conspiracy to commit any of these offences?”
  • answered “no” to a question that asked if she had ever been “convicted of, or pleaded guilty or “nolo contendre” to, any misdemeanor involving: dishonesty, breach of trust, investments, an investment-related business, fraud, false statements, omissions, wrongful taking of property, embezzlement, bribery, perjury, forgery, counterfeiting, extortion, or a conspiracy to commit any of these offenses?”


Simpson’s extensive criminal history includes 14 misdemeanor convictions during a 12 year period, two of which Simpson was required to disclose to the Firm in her employment application in response to the above questions.  Simpson’s failure to disclose both 1989 criminal matters discussed above on her application for employment misled the Firm to believe she had not been convicted of a crime. Upon completion of the employment application, the Firm hired Simpson in a non-registered position in May 2004.  Thereafter, the Firm received the Department of Justice fingerprint report disclosing Simpson’s misdemeanor convictions. When the Firm became aware of Simpson’s criminal background and her misstatement on her employment application, it terminated her employment.

The NYSE Hearing Panel found that Simpson violated NYSE Rule 476(a)(6) by engaging in conduct inconsistent with just and equitable principles of trade in that she failed to disclose her prior criminal history, including two prior misdemeanor convictions, on an employment application she submitted to her member firm.

Evelyn Billy Simpson: Censure; Barred for 6 months in all capacities

James Thomas Redman
NYSE Hearing Panel 05-123/January 13, 2006
  • On or about March 22, 1994, Redman was arrested and charged with “malicious wounding,” a felony.  On or about October 3, 1994, he was convicted of misdemeanor “battery”  and was sentenced to 90 days in jail and one-year of probation.
  • On or about April 13, 1996, Redman was arrested and charged with felony “drug possession” and felony “drug distribution.” On or about December 17, 1996, he was convicted of two misdemeanor counts of “possession of a controlled substance,” which resulted in two consecutive three-month jail sentences.
  • On or about May 7, 1998, Redman was arrested and charged with misdemeanor “unlawful assault.” On or about May 27, 1999, he was convicted of misdemeanor “battery” and was sentenced to twelve months in jail.


On or about June 1, 2004, Redman completed and submitted an Application for Employment with A.G. Edwards & Sons, Inc. (the "Firm"). The last page of the Application contained instructions at the top that expressly stated in bold and in capital letters: “arrest records are checked with the federal bureau of investigation.” The instructions went on to state: “Arrest records that have been expunged may be reported by the FBI and should be disclosed here.”

Question 3 of the application for employment asked: “Have you ever been convicted of, or pleaded guilty or no contest to, any felony or any misdemeanor other than minor traffic offenses?” 

Consistent with the notations used to respond to the other questions, Redman placed an “X” in the yes box and wrote in the right margin after that question “reckless driving.” The “X” was then crossed out and a check mark was placed in the no box.  Based on Redman’s 1994, 1996 and 1999 convictions, he was required to answer yes to this question.  His response to question 3 on the Application for Employment with the Firm was false.


Question 4 of the application for employment asked: “Have you ever been arrested for, or charged with, any felony?” 

Redman placed an X in the "no" box. Based on his arrest for malicious wounding in 1994 and for drug possession and drug distribution in 1996, he was required to answer yes to this question.  Redman's response to question 4 on the Application for Employment with the Firm was false.

The end of the Application stated in part: “The data given herein is true and accurate to the best of my knowledge and belief.” 

After this statement, Redman signed his name and dated the document.  Based upon his responses on the application for employment, the Firm hired him on June 15, 2004 in a non-registered capacity as a part-time branch employee.  On June 16, 2004, the Firm received the results of the DOJ Report that it had requested on June 3, 2004. The DOJ Report disclosed Redman’s prior criminal arrests and convictions.  After the Firm reviewed the DOJ Report, it terminated Respondent’s employment.

Prior to the hearing, NYSE moved, pursuant to Exchange Rule 476(d), to have the facts and charges in the Charge Memorandum deemed admitted, since Redman had failed to file an Answer. By Order dated October 4, 2005, the Hearing Officer granted the motion in part and denied it in part. The Hearing Officer deemed the facts contained in the Charge Memorandum admitted, while deferring the issue of whether Redman is guilty of the charges for consideration by the Hearing Panel. At the Hearing, at which neither Respondent nor any person on his behalf was present, NYSE requested that the Hearing Panel impose the penalty of an immediate permanent bar, and cited three precedents:

  • In re Robert Melo, Decision 04-44 (NYSE Hearing Panel Mar. 24, 2004) (respondent consented to finding that he failed to comply with Exchange requests for testimony with regard to allegations that he misappropriated customer funds); 
  • Dep’t of Enforcement v. PAZ Secs., Inc., Compl. No. C07030055 (N.A.S.D. N.A.C. Feb. 10, 2005) (imposing bar where respondent and his firm made multiple unfulfilled promises to cooperate, including one promise through counsel, and finding that “this is an egregious case”); 
  • Dep’t of Enforcement v. Hoeper, Compl. No. C02000037 N.A.S.D. N.A.C. Nov. 2, 2001) (imposing bar for failure to provide timely response to document requests, notwithstanding respondent’s offer of documents nine months after first request made, i.e., six months after complaint filed).

The NYSE Hearing Panel found that Redman

  1. Engaged in conduct inconsistent with just and equitable principles of trade in that he failed to disclose his criminal history on his application for employment submitted to his member firm employer; and

  2. Violated Exchange Rule 476(a) in that he failed to comply with written requests by Enforcement for testimony and information.

James Thomas Redman: Permanently barred in all capacities (The Hearing Panel found that, when a respondent has been found guilty of a substantive violation, as well as of failing to cooperate in the investigation of that substantive violation—as in the present case—a permanent bar is appropriate. The reason for this is simple: once a respondent has been found guilty of the underlying violation, there is usually no need for further investigation into that matter, so no amount of future cooperation would be useful)



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