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.
December 2011
John Daniel Abbruzzese
AWC/2010021144501/December 2011
Abbruzzese recommended that a customer purchase a variable annuity with the proceeds of his relative’s Individual Retirement Account (IRA). The customer had executed the application for a qualified annuity and shortly thereafter it was determined that the customer could not use the funds to purchase a qualified annuity. 

Abbruzzese copied the customer’s signature, without his authorization, knowledge or consent, from an earlier letter, and pasted it on the variable annuity application to authorize the change from a qualified annuity to a non-qualified annuity

Abbruzzese recommended that another customer purchase a variable annuity. The customer had entered into a reverse mortgage on her home and was referred to Abbruzzese to invest some of the proceeds to generate income for her retirement. Abbruzzese completed the variable annuity application and represented that the source of the funds was the sale of real estate, rather than a reverse mortgage, because his member firm did not permit brokers to recommend reverse mortgages. By including inaccurate information on the customer’s variable annuity application, Abbruzzese prevented the firm from maintaining accurate books and records and from assessingthe suitability of his recommendations to the customers.

Abbruzzese failed to timely respond to FINRA requests for information and documents untilhe appeared for on-the-record testimony.
John Daniel Abbruzzese: FIned $15,000; Suspended 18 months
Tags:  Signature    IRA    Reverse Mortgage     |    In: Cases of Note : FINRA
November 2011
Byron Edward Meyer
AWC/2011026619801/November 2011

Meyer verbally informed his supervisors of his outside business activities and his business plans, but failed to provide his firm with prompt written notice of his outside business activities, for which he accepted compensation. Without his relative’s knowledge, Meyer conducted subaccount transfers, or transactions, in an Individual Retirement Account (IRA) the relative held to his personal account, which held only a variable annuity contract.  The annuity sub-account transactions reduced the value of the variable annuity contract by $1,395.15 by the time the account was formally transferred to his relative.

Meyer transferred $1,800 from the relative’s IRA to his personal bank account. The firm immediately reversed the transaction as well as reimbursed Meyer’s relative $1,395.15 for the account’s reduction in value caused by Meyer’s transactions. Meyer has made full restitution to the firm.

Byron Edward Meyer: Fined $12,500; Suspended 25 business days
Tags:  Variable Annuity    IRA     |    In: Outside Business Activities
Enforcement Actions