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.
Jennifer Veronica Himes AWC/2008015411501/December 2010
Registered Sales Assistant Himes violated her member firmís policies and procedures when she facilitated day-to-day interactions between a registered representativeís customers and a non-FINRA regulated investment group outside of her firm that operated as a commodity pool. Himes failed to disclose these activities to her member firm even though firm policies and procedures required her to do so. Himes failed to use the firmís email system on numerous occasions when communicating regarding the firmís business and customers as her firm required to meet its requirements under Section 17(a) of the Securities Exchange Act of 1934 and SEC Rule 17a-4.
At another registered representativeís direction, Himes communicated with the commodity pool using non-firm email addresses and relayed messages from the representative that specifically advised customers not to use firm email addresses for communications regarding the commodity pool.
Himes engaged in this conduct to prevent the firm from detecting that she and the representative were involved with the commodity pool, causing the firm to fail to retain certain email communications relating to its business.
Jennifer Veronica Himes : Fined $5,000; Suspended 2 months
John Allan Jones (Principal) OS/2005001398602/September 2010
Acting with others, Jones participated in a fraudulent scheme to solicit investments in an unregistered hedge fund and its general partner. Jones engaged in a variety of fraudulent and deceptive sales practices and disregarded his duties and obligations of fair dealing to his customers. Jones knew, or was reckless in not knowing, that the hedge fund was engaging in a highly speculative trading strategy involving futures contracts and that information the hedge fund manager supplied, which Jones used, contained materially false and misleading statements and omissions, including a pending Commodity Futures Trading Commission (CFTC) fraud action against the hedge fund manager, the fundís theoretical and unproven performance figures, the highly speculative nature of the hedge fundís trading strategy, and the significant risks associated with an investment in the hedge fund and its general partner.
Jones ignored many ďred flags,Ē including those in the hedge fundís Private Placement Memorandum (PPM). Jones solicited his customers without conducting a reasonable investigation to determine whether the hedge fund and its general partner were suitable investments and without regard as to whether his customers were capable of evaluating and bearing the risks associated with such investments.
John Allan Jones (Principal): Fined $25,000; Suspended 4 months
Walter Allen Ellis (Principal) 2007007873101/June 2010
Ellis engaged in outside business activities without providing prompt written notice to his member firm. Ellis managed customersí accounts and effected trades in commodity futures contracts and commodity futures options through commodity trading firms and earned commissions from the firms. Ellis completed quarterly compliance questionnaires for his firm that inquired if he had engaged in an outside business activity while associated with the firm, and he answered ďnoĒ to this question, thereby knowingly providing false information to his firm, which caused its firmís books and records to be inaccurate.
Ellis willfully failed to timely amend his Form U4 with material information.
Walter Allen Ellis (Principal): Fined $22,500; Suspended 1 year
The SEC charged 15 broker-dealers with violating certain recordkeeping provisions of the Securities Exchange Act and with failing reasonably to supervise with a view to preventing and detecting those violations. Additionally, the SEC charged affiliated advisor DWS Investment Management Americas, Inc. with violating certain recordkeeping provisions... Read On