Stockbrokers In The News - Law Offices of Robert Wayne Pearce

Feb 6, 2019

Former Ameriprise Stockbroker Suspended for Failing to Follow Firm’s Policies

Robert Rushby Humberston of Longmeadow, Massachusetts submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was assessed a deferred fine of $5,000 and suspended by the Financial Industry Regulatory Authority (FINRA) for a period of three months. In September 2014, Robert Humberston joined Ameriprise Financial Services as a General Securities Representative. FINRA stated that from September 2016 through January 2018, Humberston violated FINRA Rule 2010 in which he failed to comply with his firms’ policies and procedures requiring him to disclose that one of his customers had designated him as a beneficiary of her estate. According to FINRA, when Humberston found out that the elderly customer had died and left him 10 percent of her estate, he failed to notify his firm or seek revocation of the bequest. FINRA also stated that Humberston notified his firm after receiving the funds totaling $96,662, but only after he deposited them directly in his personal bank account. Humberston allegedly declined to return the funds and instead resigned.

Feb 4, 2019

Former GCS Stockbroker Suspended for Participating in Private Transactions

Kenny Danny Mezher a former registered stockbroker with Growth Capital Services, submitted a Letter of Acceptance, Waiver and Consent (AWC) in which he was assessed a deferred fine of $5,000 and suspended by the Financial Industry Regulatory Authority (FINRA) for a period of two months for allegedly participating in private transactions. On April 22, 2016, Kenny Mezher joined Growth Capital Services (GCS) as a General Securities Representative. He remained associated with the Firm until his termination on April 11, 2017. According to FINRA, between January 2017 and March 2017, Mezher participated in four private securities transactions in violation of FINRA Rules 3280 and 2010. The findings stated that while with GCS, he was also employed by a now-defunct hedge fund called Crescent Ridge Capital Partners. Mezher allegedly sold four limited partnership interest totaling $179,500 to five investors of whom were his family and friends without providing notice or approval from his firm.

Feb 1, 2019

RBC Stockbroker Suspended for Unauthorized Transactions

Cheryl A. George of East Aurora, New York submitted a Letter of Acceptance, Waiver, and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which George was fined $5,000 and suspended for allegedly participating in unauthorized transactions. In June 2009, George joined RBC Capital Markets LLC as an Investment Company Products Variable Contracts Representative and a General Securities Representative. According to FINRA, RBC suspended George for ten business days for failing to observe firm policies and procedures regarding the authentication of a wire transfer request. The findings stated that an email was sent to George requesting a $33,000 transfer to a third-party company, which was not from the customer but rather an imposter. FINRA found that George only never received verbal authorization from the customer to sell securities in the account totaling $42,980. FINRA further stated that Ms. George falsely attested that she did receive verbal authorization and mismarked the order tickets as unsolicited.

Jan 30, 2019

Wedbush Securities & Its Founder Fined for Negligence

On July 19, 2018 a judgment issued by the United States Court of Appeals for the Ninth Circuit became final in which Wedbush Securities Inc. was fined $300,000 and Edward William Wedbush was fined $50,000 and suspended from association with any FINRA member in any principal capacity for 31 days. Edward Wedbush founded his firm in 1955 and served as a general partner when it was a partnership and became president of the Firm when it was incorporated. He also became Chief Compliance Officer (CCO) and the Business Conduct Manager (BCM) in August 2006. Wedbush was responsible for the firm’s compliance system and all regulatory filings. According to FINRA, from January 2005 to July 2010, the firm committed 158 violations of the rules and by-laws of the National Association of Securities Dealers Inc. (NASD), the New York Stock Exchange Inc. (NYSE) and FINRA. The findings stated that the firm reported 129 events late (RE-3, U4 and U5), 18 events inaccurate, and failed to file 11 forms (RE-3, U4 and U5). The Firm and Mr. Wedbush allegedly failed to reasonably supervise regulatory reportings, failed to implement the firm’s supervisory system, failed to detect and prevent violations and failed to implement corrective measures to address the regulatory reporting failures.

Jan 28, 2019

Stifel Nicolaus And Company Stockbroker Barred for Misconduct

Mitchell Toby Yanow of Boynton Beach, Florida submitted a Letter of Acceptance, Waiver, and Consent (AWC) in which Yanow was barred by the Financial Industry Regulatory Authority (FINRA) for allegedly using a client’s funds in violation of FINRA Rules 2150(a) and 2010. In April 2015, Yanow joined Stifel Nicolaus and Company Inc. as a General Securities Representative. The findings stated that Yanow was terminated by his firm on May 10, 2018 for allegedly taking money from a client’s account and using it for his own personal use without authorization. According to FINRA an 87-year-old Firm customer provided Yanow with blank checks that were to be used specifically to pay the clients caregivers if the customer could not pay them. FINRA further found that without the customer’s knowledge or approval, Yanow allegedly used the checks to convert $205,586 in funds to pay for his own expenses, including his overdue homeowner’s association fees, his children’s summer camp and to purchase a 1976 Corvette.

Jan 23, 2019

NYLife Securities Broker Suspended for Unsuitable Recommendations

David Raymond Colflesh submitted a Letter of Acceptance, Waiver, and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was suspended and ordered to pay 34,546.98 in deferred disgorgement of commissions received. David Colflesh, of Tarkio, Missouri, was registered with NYLife Securities from 1982 until 2016 as a variable contract representative and a direct participation programs representative. From October 2014 to July 2015, Mr. Colflesh allegedly recommended nondiversified mutual funds to ninety customers without having basis to believe that his recommendations were suitable because he did not understand the funds’ complexity or potential risks. According to FINRA, the customers purchased 250 funds worth $4.5 million and Mr. Colflesh earned $34,546.98 in commissions. FINRA also stated Mr. Colflesh’s recommendations exposed his customers to a level or risk that was unsuitable, given their investment objectives. Based on the foregoing, FINRA concluded David Colflesh violated FINRA Rules 2111 and 2010.

Jan 21, 2019

Key Investment Services Broker Suspended for Misrepresentations

Christopher Michael Herrmann of Greenwood, Indiana submitted a Letter of Acceptance, Waiver, and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was assessed a deferred fine of $10,000 and suspended. From September 2011 to May 2015, Herrmann was employed with Key Investment Services (KIS) as a General Securities Representative. According to FINRA, in September 2013 and October 2014, Mr. Herrmann recommended annuity transactions to retired and elderly customers. The findings stated that Mr. Herrmann failed to facilitate the transactions as a tax-free 1035 exchange, resulting in significant tax liability to the customers. Mr. Herrmann allegedly circumvented KIS’s compliance procedures and supervision by concealing these switch transactions and providing false information. Based upon the foregoing, FINRA concluded that Christopher Herrmann violated FINRA Rules 4511, 2111 and 2010.

Jan 18, 2019

Maxim Group Stockbroker Suspended for Unsuitable Recommendations

Eric Howard Kunis, of South Setauket, New York, submitted a Letter of Acceptance, Waiver, and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which Kunis was assessed a deferred fine of $2,500, suspended for two months and ordered to pay $2,189.78 in restitution to his customers. From 2002 through 2018, Kunis was registered with Maxim Group as a General Securities Principal. According to FINRA, between February 2012 and January 2017 Kunis engaged in an unsuitable pattern of short-term trading in the accounts of eleven customers. FINRA stated that Kunis repeatedly recommended his customers purchase and sell unit investment trusts (UITs) before their maturity date, causing the customers to incur unnecessary sales charges. Based on the foregoing, FINRA concluded that Kunis violated NASD Rule 2310 along with FINRA Rules 2111 and 2010.

Jan 16, 2019

Financial West Stockbroker Barred for Churning and Unsuitable Recommendations

John Scott Simoncic of Carlsbad, California submitted a Letter of Acceptance, Waiver, and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he was barred for willfully violating Section 10(b) of the Securities Exchange Act of 1934, Exchange Act Rule 10b-5 and FINRA Rules 2020, 2111 and 2010. From May 2014 until November 2016 Simoncic was registered with Financial West as a General Securities Representative and Supervising Principal. According to FINRA, while registered with Financial West, Mr. Simoncic was responsible for churning, engaging in excessive trading, and making unsuitable recommendations in five accounts held by two customers. FINRA stated that the customers gave Mr. Simoncic de facto control over the accounts and relied upon him completely to advise the accounts. Mr. Simoncic allegedly charged the customers commissions and fees totaling $79,000, earning 88 percent of his gross commission solely from the accounts, and caused the customers to exceed losses of $105,000.

Jan 14, 2019

Former NYLife Representative Suspended for Privately Settling Complaint

Jose Luis Paula submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) for allegedly violating FINRA Rule 2010. Jose Paula joined NYLife Securities LLC as an Investment Company and Variable Contracts Products Representative in March 2010 until his termination in January 2017. According to FINRA, Paula attempted to settle a customer complaint related to losses in her account by agreeing to refund her the total principal associated with the trades. The findings stated that when Mr. Paula issued a check in the amount of $10,000, he told the customer not to cash it until he could fund his checking account, but never did. The findings also stated that Mr. Paula never informed his firm of the complaint nor did he obtain authorization to settle the complaint, thereby violating FINRA Rule 2010.