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.
Kelvin Shaw ( AWC/2008015411502/December 2010
Shaw violated his member firmís policies and procedures when he recommended that certain customers invest in a non-FINRA regulated investment group outside of his firm that operated as a commodity pool, and facilitated the day-to-day interactions between certain customers and the commodity pool without providing his firm with written notice. Shaw used, and directed others in his office to use, unapproved email addresses that prevented the firm from reviewing communications regarding his activities.
The commodity pool was exposed as a Ponzi scheme and most of Shawís firm customers lost a total of approximately $660,000 of their investments. Shaw failed to use the firmís email system on numerous occasions when communicating regarding firm business, and its customers and the firm relied on his compliance to meet its requirements under SEC Rule 17a-4. Shaw directed certain of his staff to communicate with the commodity pool using non-firm email addresses and advised customers not to use firm email addresses for communications regarding the commodity pool in order to prevent the firm from detecting his involvement in the commodity pool. In addition, Shaw caused his firm to fail to retain certain email communications related to its business.
Shaw failed to fully and completely respond to a FINRA request for documents and information.
Scott Douglas Pionk (Principal) AWC/2009018512901/December 2010
Pionk solicited $1.7 million from investors, including firm customers, and deposited the funds into his private companyís bank accounts over which he had sole control, representing to the customers that he would use the money to make legitimate investments on their behalf. Pionk made approximately $500,000 in interest payments to earlier investors using funds he received from later investors and converted substantially all of the remaining funds to his personal benefit by making checks payable to him or withdrawing cash from ATMs. Pionk failed to respond to FINRA requests for documents and to appear for an on-therecord interview.
Harold Lee Glover Jr. ( AWC/2008015254101/July 2010
Glover engaged in private securities transactions without providing his member firm with prior written notice. Glover recommended that his customers invest in investment funds of an entity which was not approved by his firm and was exposed by federal authorities as a Ponzi scheme.
Glover did not receive any compensation and his customers lost approximately $470,000 by investing in the funds.
Harold Lee Glover Jr. (: Fined $5,000; Suspended 4 months
Bruce Edward Hammonds OS/2008013990501/February 2010
Hammonds fraudulently induced his member firmís customers and other investors to liquidate their positions or withdraw funds from their accounts and invest in excess of $1 million in a Ponzi scheme he orchestrated. Hammonds formed a partnership, and opened a partnership account that firm supervisors approved, but Hammond never disclosed the firm account on the firmís electronic compliance disclosure system as an account in which he had an interest.
Hammonds told his customers and investors that his member firm would manage their investments, and he misrepresented the investment returns and the type of products (indexed funds, futures contracts or securities) the partnership would invest in. He misappropriated the funds, using them to pay for personal expenses as well as to pay investor returns typical of Ponzi scheme. Hammonds provided customers and investors with fictitious account statements reporting growth in their investments.
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