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.
Douglas Joe Barker (Supervisor) 2007009520202/October 2010
Barker recommended and effected unsuitable short-term sales in customers’ accounts of closed-end funds less than six months after purchasing them at an initial public offering. Barker did not possess a reasonable basis to believe his recommendations and that the resulting transactions were suitable for his customers whose investment objectives were conservative to moderate. The findings also stated that the sales accounted for customer losses exceeding $350,000, for which he earned commissions totaling approximately $100,000.
Douglas Joe Barker (Supervisor): Fined $125,000; Suspended 6 months
Keener made unsuitable trade recommendations in a customer’s accounts by recommending purchases resulting in an overconcentration of non-investment grade bonds and other equities for a senior couple with no previous investment experience. Keener mismarked order tickets for purchases for these customers and other customers as “unsolicited” when they were “solicited.” Keener exercised discretion with verbal, but not written, authorization, in customers’ accounts, and although Keener frequently spoke to these customers, he did not speak to them every time he entered a transaction in their accounts. Keener did not have the customers’ or his member firm’s written authorization to engage in such discretionary trading.
David John DeWald AWC/2009019041601/September 2010
DeWald participated in private securities transactions without first giving his member firm written notice of his intentions and receiving approval.
DeWald made unsuitable recommendations to customers given his complete failure to perform a reasonable investigation concerning the product and that, while reviewing the product information on the company’s website, he took its representations for face value and failed to independently verify those representations.
DeWald made negligent misrepresentations of material fact in connection with the sale of installment plan contracts; he misrepresented to customers that they could take charitable tax deductions in connection with their investments, which was not true. DeWald provided customers with sales materials containing misleading and oversimplified descriptions of the contracts, and failed to obtain a firm principal’s approval prior to their use.
DeWald failed to respond to FINRA requests for documents.
David John DeWald : Ordered to pay $124,519.03, plus interest, in restitution; Barred
Louis John Liberatore Sr. AWC/2008013937902/September 2010
Liberatore engaged in trading in customers’ accounts and did not have a reasonable basis for believing that his recommendations to the customers were suitable, based on the facts the customers disclosed as to their investment objectives and financial needs. One account was an IRA that traded in speculative and low-priced penny stocks, and the other account was a joint account and traded in options and on margin.
Louis John Liberatore Sr.: No Fine in light of financial status; Suspended 3 months
Marshell Earl Miller OS/2007009413701/September 2010
Miller was the registered representative for several burial associations for which the investment objectives were income and the risk factors were conservative, investment-grade or moderate. Miller engaged in unsuitable and excessive trading in the accounts, resulting in significant commissions for him and losses for the customers.
Marshell Earl Miller : No Fine in light of financial status; Suspended 6 months
William Gregory Slonecker 2007009442501/September 2010
Slonecker recommended and executed unsuitable variable annuity contract replacements or switches involving customers without regard for their age or financial backgrounds, and received $85,000 in commissions. Slonecker’s customers received no significant benefit from the transactions but incurred substantial surrender charges, new extended surrender periods and, in some cases, paid additional fees.
Slonecker made numerous false entries in his member firm’s electronic order-entry system and on other firm records to obtain approval for the switches he recommended to the customers, causing his firm to create and maintain inaccurate books and records. Slonecker’s false entries in the firm’s electronic order-entry system and suitability questionnaires were material false representations he made to his firm.
Slonecker falsely represented to customers that surrender fees associated with the switches would be fully recovered by the bonuses they would receive from their purchases of new variable annuity contracts, when he knew or should have known that the bonuses did not offset the surrender fees and he failed to disclose and explain to the customers the surrender charges associated with switch transactions.
Slonecker failed to respond to FINRA requests for information.
Siegel recommended and effected sales of securities to customers without having reasonable grounds for believing that the recommendations and resultant sales were suitable for such customers, and participated in private securities transactions without prior written notice to, and approval from, his member firm.
Michael Frederick Siegel : Fined $30,000; Suspended for two consecutive 6 month terms
Registered representatives at Registered Principal Montes' member firm who used options strategies in their customer accounts, repeatedly became subject to active account surveillance and appeared on compliance department spreadsheets when their customer accounts sustained losses from voluminous stock and options transactions. Despite being made aware of “red flags” indicating that unsuitable and excessive trading was occurring in customer accounts, Montes failed to take reasonable supervisory steps to respond to the “red flags” with a view toward preventing the unsuitable and excessive trading and did not adequately investigate the representatives’ options trading.
George Albert Montes: Fined $15,000; Suspended 1 year in Principal capacity only; Required to requalify by examination before acting in any principal capacity with a FINRA member.
Registered Principal Jarkas recommended or, in the exercise of discretion, executed securities transactions in a customer’s account at his member firm without having a reasonable basis for believing that the volume of trading he recommended was suitable for the customer in light of information he knew about the customer’s financial circumstances, needs, other security holdings and investment objectives. Jarkas caused the execution of approximately 2,400 transactions in the customer’s account and received commissions of approximately $240,000.
FINRA, FinCen, Networks, Authorities, Priorities, Statements, Guidance, AML, CFT, BSA, and NBFI (BrokeAndBroker.com Blog)http://www.brokeandbroker.com/6108/finra-fincen/Now we take that one step from the sublime to the ridiculous. FINRA actually believes that it is somehow furthering its regulatory mission when it publishes a Regulatory Notice about Fin... Read On