Enforcement Actions
Financial Industry Regulatory Authority (FINRA)
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.
May 2010
Michael John Rukujzo (Principal)
AWC/2007009609202/May 2010

Rukujzo participated in the negotiation and consummation of an Asset Purchase Agreement transaction, involving

  • another FINRA member,
  • a non broker-dealer entity, and
  • an entity which was a customer of his member firm.

The transaction resulted in the transfer from the other FINRA member of multiple customer mutual fund positions for which Rukujzo’s firm had become the dealer of record to the dominion and control of his firm’s customer (the entity), which exposed customers’ accounts to losses as a result of the entity’s speculative margin trading. Rukujzo’s firm facilitated the transfer of certain positions held directly at mutual fund companies to an omnibus margin account held and maintained at the firm’s clearing firm in the name of the entity, for which the firm was the broker-dealer of record. The Firm advised its clearing firm that the customers had authorized the use of their mutual fund assets as collateral when in fact, the customers did not sign any margin authorization forms, and information sent to the customers did not mention a margin account, the use of margin in investment strategies, or the use of the customer’s assets as collateral to support margin trading in the omnibus account.

Rukujzo allowed an unregistered person to function as a representative and the firm’s principal without being registered. Under Rukujzo’s direction and control, his firm engaged in the change of dealer of record designation without the customer’s authorization, and allowed his firm to participate in a transaction that he knew, or should have known, required approval from FINRA, and that approval was neither requested nor obtained.

Michael John Rukujzo (Principal): In light of of Rukujzo’s financial status, no fine imponsed; Barred in Principal capacity only
Bill Singer's Comment
An interesting case and fairly explained by FINRA. If you are contemplating buying or selling a FINRA firm, be aware of your regulatory obligations, many of which are set forth above.
Enforcement Actions