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.
November 2010
Paul Michael Tavelman
AWC/2008015108101/November 2010

Tavelman recommended an unsuitable concentration of high-risk investments for an estate account. As a result of Tavelmanís investment choices, approximately 50 percent to 95 percent of the estate accountís investments during the relevant period included one or more high-risk income funds.

Tavelman recommended the transactions without having reasonable grounds for believing that such transactions were suitable for the customer in view of the nature of the account and the customerís financial situation, investment objectives and needs. The recommendations were unsuitable in that the executor of the estate account was seeking conservative, growth investments for the account without risk to principal, and the estate account suffered losses as a result of Tavelmanís unsuitable recommendations.

Tavelman exercised discretion in the estate account without the executorís prior written authorization and his member firmís written acceptance of the account as discretionary.

Paul Michael Tavelman : No fine in light of financial status; Ordered to pay $7,000 restitution to customer; Suspended 30 days
Tags:  Estate     |    In: Cases of Note : FINRA
Bill Singer's Comment
An interesting case on several levels.  First, many RRs think that Estate accounts are a godsend (or, well, okay, first a god-takeaway).  The logic is that the account's owner is, you know, dead -- and not likely to complain.  In reality, the estate owns the estate account and heirs don't like discovering that Aunt Jane left them $1,000,000 and that as a result of the Executor following a broker's advice, that inheritance is now $21.34.  Similarly, barring something really unusual, most estates should be prudently and conservatively managed so, "no," these are not good places to generally park pennystocks or risky investments.
January 2010
Michael Gerald Delano III
AWC/2008013543001/January 2010
Delano was given the power of attorney over a deceased friendís estate by the deceasedís brother and was requested to handle the $50,000 in life insurance proceeds. Delano deposited the funds into his personal bank account and used the majority of the funds for his personal expenses without the brotherís consent. Delano represented to the brother that he had invested the life insurance proceeds into an annuity on the brotherís behalf.
Michael Gerald Delano III: Barred
Tags:  Power of Attorney    Deceased    Estate         |    In: Cases of Note : FINRA
Bill Singer's Comment
Talk about inviting bad Karma.  Wow -- ripping off the dead and then lying about it. 
Enforcement Actions