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.
September 2011
Nicholas C. Dito
AWC/2009020432101/September 2011

Dito obtained possession of a computer flash drive that contained non-public customer account information and mined out selected excerpts for his own use by emailing the information, on separate occasions, to his member firm email address. Among other things, the flash drive contained approximately 350 account statements of customers from a FINRA member firm -- each of the customer account statements contained in the flash drive displayed non-public financial information including customer names, addresses, account numbers, financial positions, broker identification numbers and account values. Subsequent to reviewing the contents of the flash drive, Dito copied customer account information from the non-public customer account information contained in the flash drive.

The first email he sent to his firm email address contained the names and addresses of approximately 300 customers, which Dito had copied directly from FINRA member firm customer account statements contained in the flash drive. Dito intended to use the customer account information contained on the first email to cold-call prospective customers.

The second email Dito sent to his firm email address consisted of a listing of financial positions on the flash drive that were for a FINRA member firm securities account a customer owned that showed the customerís equity stock holdings and their total net value. 

Dito failed to fully cooperate with FINRA and answer all of FINRAís questions at an on-the-record examination.

Nicholas C. Dito : Barred
Tags:  Email    Computers    Electronic Storage     |    In: Cases of Note : FINRA
Bill Singer's Comment
I'm sort of understanding this case but only to the extent that FINRA's alleging that Dito apparently intended to misuse confidential customer information.  As to the issue involving his copying of a customer's holdings and valuation, I'm not fully understanding the charge.  Based upon FINRA's monthly report, it appears that Dito simply copied the data on the flash drive and sent it to his email address.  I get that and understand the concerns inherent solely in that act; however, it seems a bit of a double-dip to additionally complain that not only did Dito copy all the data on a flash drive but that he also copied a specific sub-set (here, the customer's positions).
June 2011
Jon Tadd Roberts
AWC/2009018509601/June 2011

Roberts sent unapproved emails from his personal email address to his member firmís customers and a potential investor that consisted of emails with attached documents containing misrepresentations and misleading statements that he created on his home computer that were written on his firmís letterhead.

Roberts misrepresented that his firm would approve the issuance of a line of credit of up to $10 billion to a firm customer and a potential investor if certain conditions were met. Roberts attached another document concerning the issuance of a multi-billion dollar line of credit to additional emails he sent to a firm customer.

Roberts did not provide copies of the documents for review and approval to his firm. By attaching documents that contained misrepresentations and misleading statements to emails sent to a firm customer and a potential investor, Roberts exposed his firm to significant potential liability. Roberts sent an unapproved email from his personal email to another firm customer and attached a letter on firm letterhead with wire transfer instructions in connection with certificates of deposit. In addition, Roberts forwarded the unapproved correspondence from his home computer, thereby bypassing the firmís surveillance systems and preventing the firmís review and approval.

Jon Tadd Roberts : Barred
Tags:  Email    Communications    Computers    Correspondence     |    In: Cases of Note : FINRA
Bill Singer's Comment
Hey, if you're going to get yourself barred from the industry for sending unapproved emails, you might as well go big time -- $10 Billion.  Wow, nice, large, round number.
April 2011
DaLean Annette Rials (Supervisor)
AWC/2009019405601/April 2011

Rials misappropriated approximated $70,000 from her member firm. Rials, as operations manager of her firmís branch office, had authority to approve credits to customer accounts up to a specified dollar amount without additional approval. Rials used this authority to credit reimbursements totaling approximately $50,000 for non-existent fees and expenses in accounts belonging to her friends and family. Rials then withdrew the credited amounts from family accounts or received cash or checks from friends for the credited amounts.

Rials submitted expense reports for approximately $20,000 in personal expenses, falsely identifying them as legitimate business expenses. Rials improperly accessed her supervisorís computer and approved some of her own expenses reports.

DaLean Annette Rials (Supervisor): Barred
Tags:  Expenses    Computers     |    In: Cases of Note : FINRA
Bill Singer's Comment
Frankly, wow.  Gotta giver Rials some credit. I mean, you know, as far as these things goes, this one was somewhat clever. $50,000 in bogus fees/expenses and another $20,000 for bogus expenses. And, to top it all off, she uses her supervisor's computer to clear the transactions.
Enforcement Actions