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 2010
Dante Thomas Garcia DeMiro
AWC/2008012498701/December 2010
DeMiro engaged in private securities transactions outside the scope of his employment with his firm when he sold $587,000 of promissory notes in a Regulation D offering of an entity to customers. DeMiro did not provide his firm with prior written notice of the sales and did not receive the firmís written approval or acknowledgement for these sales.
Dante Thomas Garcia DeMiro : Fined $5,000; Suspended 9 months
Kevin Scott Pound
2008012531501/December 2010
Associated Person Pound participated in private securities transactions by selling promissory notes without giving prior written notice to, or obtaining prior written approval from, his member firm. He failed to timely respond to FINRAís request for information.
October 2010
Julie Sheau Lin Ting
AWC/2008016435101/October 2010
Ting participated in private securities transactions without prior written notice to, or written permission from, her member firm to engage in the transactions, for which she received compensation. Ting referred investors, some of whom were her firmís customers, to entities from which some of these investors purchased securities in the form of promissory notes and stock. Ting received approximately $259,958 as compensation for her referrals of investors.
Julie Sheau Lin Ting : No FIne in light of financial status; Suspended 12 months
July 2010
Matthew James Ferber Sr.
AWC/2009017295301/July 2010
Ferber executed a promissory note in which he agreed to reimburse a firm customer $64,000 for losses in the customerís account. The settlement was without his firmís knowledge or authorization and violated firm policy that prohibited registered representatives from guaranteeing (through implication or statement) any profit or absorbing any loss for a client and settling customer complaints.
Matthew James Ferber Sr. : Fined $5,000; Suspended 30 business days
Tags:  Promissory Notes     |    In: Cases of Note : FINRA
Richard Aaron Paul
AWC/2008013523101/July 2010
Paul engaged in private securities transactions without prior written notice to, or prior written approval from, his member firm. Paul's sale of convertible balloon promissory notes totaling approximately $545,000 was done outside the scope of his employment with his firm and without prior written notice to his firm.
Richard Aaron Paul : Fined $50,000; Suspended 9 months
Tags:  Promissory Notes     |    In: Cases of Note : FINRA
Richard Elmer Gilbert (Principal)
AWC/2008014574101/July 2010
Gilbert borrowed money from investors, including firm customers, to raise funds for a residential real estate development company he owned and controlled, and in connection with the borrowing, Gilbert participated in securities transactions when he issued promissory notes totaling approximately $1,095,072, which he signed on his companyís behalf. Gilbertís member firm prohibited borrowing from customers, and Gilbert failed to provide his firm with written notice of his intention to engage in private securities transactions and failed to receive his firmís written permission.
Richard Elmer Gilbert (Principal): No Fine in light of financial status: Suspended 1 year (After consideration of sanctions previously imposed by the State of Michigan of six months for the same conduct, FINRA determined to give Gilbert credit for serving six months of the suspension, but he is required to serve six months of the suspension.)
Tags:  Borrowing    Promissory Notes     |    In: Cases of Note : FINRA
Bill Singer's Comment

A fairly common outcome is a regulatory case in which an RR is hit with the dual violation of engaging in a private securities transaction and improperly borrowing money from clients.  An interesting aspect of this case is that not only did FINRA waive the imposition of a fine but it also credited Gilbert with six months of a one-year suspension for time served pursuant to a suspension imposed by the State of Michigan.

April 2010
Heriberto Americo Artiga Sr.
AWC/2009017673201/April 2010
Artiga engaged in private securities transactions by selling approximately $2.5 million of promissory notes to individuals, for which he received commissions of approximately $157,000. Artiga invested the sale proceeds into a company that was promising purportedly risk-free, high yield investment programs. He engaged in this activity without providing prior written notice, or any notice, to his member firm. His investors ultimately lost more than $2.2 million of the $2.5 million that they had invested.
Heriberto Americo Artiga Sr.: Barred
Tags:  Promissory Notes         |    In: Cases of Note : FINRA
Bill Singer's Comment
And folks wonder why member firms don't want to approve Private Securities Transactions?
Enforcement Actions