Broker Misconduct - Law Offices of Robert Wayne Pearce

Aug 5, 2020

Former Berthel Fisher Stockbroker Mason Wayne Gann Suspended for Unsuitable Recommendations

Mason Wayne Gann of Dallas, Texas submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was fined and suspended for unsuitable recommendations in violation of FINRA Rule 2111 and 2010. From June 2012 until February 2018, Mason Wayne Gann was registered with Berthel Fisher as a General Securities Representative. According to the FINRA findings, Mr. Gann allegedly recommended and effected a risky options-trading strategy in the account of a senior customer. The FINRA findings stated that Mr. Gann knew the customer had limited income, modest retirement savings, and minimal investment knowledge and lacked a reasonable basis for believing that his recommendations were suitable. The findings also stated that Mr. Gann recommended the customer begin trading options to generate more income in his account which was valued at approximately $205,000. The customer began withdrawing $1500 each month and after two years, his account declined to approximately $120,000 with a loss of more than $12,500 as a direct result of the unsuitable options strategy because he did not produce enough income or gains to offset his withdrawals. In addition to these findings, the combined effect of investment losses and steady withdrawals reduced the customers account to below $20,000 over a 3-year period.

Aug 3, 2020

Former Century Securities Stockbroker Daniel R. Castoriano Suspended for Unauthorized Trading

Daniel R. Castoriano of New Orleans, Louisiana submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he has been fined and suspended for allegedly engaging in unauthorized trading in violation of NASD Rule 2510(b) and FINRA Rule 2010. From December 2003 until June 2019, Daniel R. Castoriano was registered with Century Securities Associates, Inc. (Century) until they filed a Form U5 reporting that Mr. Castoriano was permitted to resign in connection with exercising discretion in a customers account. According to the findings, FINRA began investigating Mr. Castoriano after the Form U5 was filed alleging that he used discretion to execute six trades pursuant to an investment strategy without written authorization from the customer or permission from the firm. The FINRA findings stated that Century payed the customer $1,844 to settle a complaint about the trades and associated losses in the account.

Jul 31, 2020

Dakota Securities International Expelled & Former Owner Bruce Martin Zipper Barred for Misconduct

Dakota Securities International (Dakota) and Bruce Martin Zipper (Mr. Zipper) appealed a National Adjudicatory Council (NAC) decision to the Securities and Exchange Commission (SEC). The Hearing Panel imposed three expulsions on Dakota for allegedly failing to maintain accurate books and records, failing to supervise, and allowing Mr. Zipper to associate with them and engage in activities requiring registration while suspended. The Hearing Panel also imposed two bars on Mr. Zipper for associating with Dakota and engaging in the particular activities while suspended and intentionally misidentifying the representative of record on customer transactions. In 2004, Mr. Zipper founded Dakota and was the majority owner until January 2018, when he sold his ownership. According to the NAC findings, Mr. Zipper executed then later tried to withdraw from an AWC that was final and non-appealable due to his failure to disclose three unsatisfied judgments on his Form U4. The findings stated that FINRA informed Mr. Zipper of his suspension, and during his absence he allegedly arranged for Dakota to continue operations without him for the three months. During the same period, Dakota did not restrict Mr. Zipper’s access to the firm’s email system or to the firm’s trading system in which he engaged and recommended transactions while suspended. In addition to the NAC findings, Mr. Zipper admitted that he intentionally misidentified the representative of record on hundreds of trades caused Dakota to maintain inaccurate books and records. Dakota Securities International was expelled from FINRA membership and Mr. Zipper was barred from association with any FINRA member in all capacities.

Jul 24, 2020

Former Dakota Director Carlos Ricardo Fuenmayor Suspended for Misconduct

Carlos Ricardo Fuenmayor of Key Biscayne, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for allegedly acting as a General Securities Principal and a General Securities Representative without being registered in either capacity, in violation of NASD Rules 1021 and 1031, and FINRA Rule 2010. From September 2013 through October 2016, Carlos Ricardo Fuenmayor was associated with Dakota Securities International, Inc. (Dakota) as Director and 20% owner. According to FINRA, Fuenmayor securities licenses had lapsed in September 2013 when he purchased 20% ownership interest in Dakota. The findings stated that Fuenmayor did not become registered as a General Securities Principal or a General Securities Representative until 2015 but was actively engaged in Dakota’s securities business and in the management of its securities business. In addition to the FINRA findings, Fuenmayor was primarily responsible for the hiring and management of personnel at Dakota, advised registered representatives about different types of trading strategies and ordered the registered representatives to execute trades.

Jul 22, 2020

Former NYLife Securities Broker William Hite Suspended by FINRA for Forgery

William James Hite, a former registered representative of NY Life Securities LLC, submitted a Letter of Acceptance, Waiver, and Consent (AWC) in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he forged an elderly customer’s signature on four documents. According to FINRA, William Hite of Shelton Connecticut allegedly forged his elderly customer’s signature when he was not successful in reaching him to sign the document. Subsequently, Mr. Hite electronically forged the same customer’s signature on three more documents, including a fixed annuity application, client profile form, and replacement of life insurance or annuities form. What Mr. Hite was unaware of at the times of the forgeries, is that his elderly customer had passed away.

Jul 20, 2020

Former MML Investors Broker William McGowan Suspended for Private Securities Transactions

William Blake McGowan of Little Rock Arkansas submitted a Letter of Acceptance, Waiver, and Consent (AWC) in which he was fined and suspended by the Financial Industry Regulatory Authority (FINRA) for engaging in private securities transactions, a type of broker misconduct known as selling away. In July 2017, while employed by MML Investors Services, LLC, William McGowan purchased $55,000 of securities in a pooled real estate investment. More specifically, Mr. McGowan purchased shares in an Arkansas LLC formed to purchase and manage vacation property rentals in Florida. FINRA found that Mr. McGowan failed to provide the required prior written notice to his member firm of the transaction. Further, he falsely stated on a compliance attestation that he had not made any personal investments.

Jul 17, 2020

Former Cetera Advisors Broker Scott Kozak Suspended for Private Securities Transactions

Scott Patrick Kozak of Highlands Ranch, Colorado submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was suspended for two years for allegedly engaging in private securities transactions, known also as selling away. Between 2011 and 2014, while registered with Cetera Advisors LLC, Scott Kozak allegedly engaged in private securities transactions without written notice or approval from his member firm. According to FINRA, Mr. Kozak solicited Cetera customers and registered representatives to invest $1,166,000 in two companies’ securities. Mr. Kozak also invested his own money in the companies. Further, Mr. Kozak was found by FINRA to have solicited investments in promissory notes from seven Cetera customers, who collectively invested $380,000 in the promissory notes. NASD Rule 3040 prohibits associated persons from participating in any manner in a private securities transaction outside the regular course or scope of their employment without first providing written notice to the member firm. The written notice must describe in detail the proposed transaction and the person’s proposed role therein, and whether he has received or may receive selling compensation in connection with the transaction. A violation of NASD Rule 3040 is a violation of FINRA Rule 2010, which requires members and associated persons to observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business.

Jul 15, 2020

FINRA Suspends Former PlanMember Securities Broker Quincy Caldwell for Unsuitable Mutual Fund Trades

Quincy DeEarl Caldwell, of Katy Texas, submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for allegedly recommending and executing unsuitable mutual fund trades, including switches, in customer accounts, causing the customers to suffer losses of approximately $57,820. FINRA alleged that Quincy Caldwell recommended and effected unsuitable mutual fund trades in six customer accounts, including 22 mutual fund switches. Whereas Class A mutual funds are designed to be longer-term investments, Mr. Caldwell allegedly made 119 unsuitable short-term mutual fund trades, an average holding time of just 110 days. Due to Mr. Caldwell’s unsuitable recommendations and short-term mutual fund trades, his six customers incurred $57,820 in Class A mutual fund sales charges.

Jul 13, 2020

Former National Planning Corporation Broker Louis Cook Barred for Misrepresentations

Louis Cook of Staten Island, New York submitted a Letter of Acceptance, Waiver, and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was barred from association with any FINRA member for allegedly making intentional misrepresentations to customers, many of whom were elderly investors. From November 2009 to November 2017, Louis Cook was employed with National Planning Corporation as an Investment Company Products/Variable Contracts Representative. According to FINRA, Louis Cook made intentional misrepresentations in a cover letter he sent to customers which included a third-party authorization form. Mr. Cook induced his elderly investor customers to sign the authorization form by misrepresenting that the form needed to be signed in order for Mr. Cook to continue servicing their variable annuity policies. After inducing his customers to sign the authorization forms, Mr. Cook is alleged by FINRA to have used the customers’ authorization to withdraw money from customer accounts for his own personal use. By making intentional misrepresentations to his customers, which induced them to sign the Third Party Authorization Forms, Mr. Cook allegedly violated FINRA Rule 2010. By improperly using funds from his customers’ variable annuities for his own personal use, Mr. Cook separately is alleged to have violated FINRA Rules 2150(a) and 2010. Without admitting or denying FINRA’s findings, Louis Cook has been barred from association with any FINRA member in any capacity.

Jul 10, 2020

Former Edward Jones Broker Jennifer Basey Suspended by FINRA for Forgery

Jennifer Lillian Basey, a former registered representative of Edward D. Jones & Co., submitted a Letter of Acceptance, Waiver, and Consent (AWC) in which she consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that she falsified a customer’s signature and forged customers’ initials. According to FINRA, Jennifer Basey of Lehigh Acres Florida falsified a customer’s signature on a document to facilitate an authorized customer asset transfer. Further, between October 22, 2019 and November 5, 2019, Ms. Basey forged the initials of two other customers, a married couple, to facilitate another transfer. For violating FINRA Rule 2010, which requires FINRA members to observe high standards of commercial honor, FINRA assessed Ms. Basey a fine of $5,000 and suspended her for two months. The suspension is in effect from April 20, 2020 through June 19, 2020.