Stockbrokers In The News - Law Offices of Robert Wayne Pearce

Sep 16, 2016

Robert W. Baird & Co. and Rolf Parker Griffith III Sanctioned for Supervisory Failures

Robert W. Baird & Co. of Milwaukee, Wisconsin and Rolf Parker Griffith III of Nashville, Tennessee submitted a Letter of Acceptance, Waiver and Consent to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly failing to reasonably supervise a former registered representative’s misuse of customer funds. FINRA alleges that during the period July 1, 2013 through June 30, 2014, Robert W. Baird & Co. failed to establish, maintain and enforce a supervisory system and written supervisory procedures for correcting trade errors that was reasonably designed to ensure compliance with applicable laws, regulations and rules. FINRA claimed the brokerage firm did not provide its supervisors with any training or guidance on how to review, approve or process trade corrections in violation of NASD Conduct Rule 3010 and FINRA Rule 2010. Without admitting or denying the FINRA findings, Robert W. Baird & Co. was censured and was ordered to pay a $200,000 fine and ordered to adopt and certify to FINRA that it put in place reasonable supervisory procedures for trade corrections to prevent abuse of customers.

Sep 9, 2016

FOG Equities and Supervisors Fined and Suspended for AML & FFI Supervisory Failures

FOG Equities LLC (FOG) of Chicago, Illinois, Scott Epstein of Crystal Lake, Illinois, and David Spack of San Fransisco, California submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly failing to establish, implement and maintain an adequate supervisory system and written supervisory procedures for the FOG’s low-priced securities business that were reasonably designed to achieve compliance with Section 5 of the Securities Act of 1933. FINRA investigators found that FOG, Epstein, and Spack failed to establish, maintain and implement anti-money laundering (AML) procedures reasonably designed to detect and report suspicious transactions related to low-priced securities transactions. Between May 2014 and February 2015, the Respondents failed to detect and investigate ”red flags” indicative of potentially suspicious account activity in violation of FINRA Rules 3310(a) and 2010.

Sep 7, 2016

Paul Rampoldi & William Blythe Under SEC Investigation for Insider Trading Scheme

Paul T. Rampoldi and William S. Blythe III, were named Respondents in a Securities and Exchange Commission (SEC) complaint that alleges the two participated in an insider trading scheme to profit in advance of two major pharmaceutical company announcements. The insider trading case involved the securities Ardea Biosciences, Inc. (Ardea), a California-based biotechnology company. The SEC alleged, in advance of several announcements between April 2009 and April 2012, Michael J. Fefferman, who was Ardea’s Senior Director of Information Technology, tipped his brother-in-law nonpublic information concerning an agreement between Ardea and another company to license a cancer drug and an acquisition of Ardea by AstraZeneca PLC (AstraZeneca). This information eventually came to Mr. Rampoldi, for which the SEC alleges, he used along with his friend Mr. Blythe to illicit profits by trading ahead of the pharmaceutical announcements. Hopefully, Mr. Rampoldi and Mr. Blythe have obtained skilled representation because they have a battle on their hands.

Sep 5, 2016

Matrix Capital Markets Under SEC Investigation for Fraud and Misappropriation of Funds

Matrix Capital Markets (Matrix) and firm representative, Nicholas Mitsakos of San Francisco, California were named Respondents in a Securities and Exchange Commission (SEC) complaint that alleges the firm, acting through Mr. Mitsakos, falsely marketed themselves and used clients’ funds for their own personal use. The SEC alleges from approximately the spring of 2014 to the present, the Respondents made false and misleading statements to prospective investors and financial institutions in order to raise funds and increase clientele. The SEC alleged that Mr. Mitsakos made numerous false and misleading statements included lying about investment returns and their broker and auditor relationships. According to the SEC, the Respondents marketed themselves as experienced money managers with a highly successful track record. They claimed to be managing millions, when in fact they did not manage client assets at all, and allegedly fabricated a hypothetical portfolio of investments earning 20-66% annual returns.

Aug 31, 2016

Investment Center Representative Complaints Lead to Investigation and Firm Fine

President of The Investment Center, Inc. (Investment Center) Ralph Devito was named as a Respondent in a Texas State Securities Board (TSSB) investigation that alleged Mr. Devito failed to properly supervise a registered representative with the firm. The investigation arose after the TSSB received a complaint alleging an Investment Center employee recommended unsuitable investments. As President of The Investment Center, the firm’s written procedures required Mr. Devito to conduct a reasonable investigation into a representative’s activity. The TSSB found that between January 2010 and March 2014, an Investment Center employee recommended and executed several securities transactions that raised numerous “red flags.” TSSB alleges Mr. Devito either failed to notice or chose to ignore those “red flags” in client accounts. The investigation found that a majority of the representatives’ clients held over 95% of their total assets in equity positions of a single energy company.

Aug 29, 2016

Huntington Representative Barred, Ordered to Pay $800k Restitution for UIT Misrepresentations

David Miller of Columbus, Ohio was named Respondent in a Financial Industry Regulatory Authority (FINRA) complaint that alleged he made negligent misrepresentations and omissions of material fact in connection with customers’ purchases of UITs. FINRA alleged that Mr. Miller recommended 140 UIT purchases totaling over $5.3 million in 129 customer accounts without having a reasonable basis to make the recommendations, in violation of FINRA Rules 2111 and 2010. From June 2008 through August 2013, Mr. Miller was registered as a General Securities Representative (GSR) with The Huntington Investment Company (Huntington), the broker-dealer affiliate of The Huntington National Bank (Huntington Bank). The FINRA complaint originated after Huntington filed a Form U5 on August 27, 2013, disclosing that Mr. Miller had “violated industry standards of conduct.” Upon investigation, FINRA found that Mr. Miller engaged in a pattern of recommending unsuitable UITs without having a reasonable basis for the recommendations, causing his customers to lose a total of $1,019,656.83.

Aug 26, 2016

Former Wells Fargo Representative Barred for Mismanaging Client’s Will

Wonnie Short of Nashville, Tennessee submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly failing to ensure that a Wells Fargo Advisors LLC, (Wells Fargo) customer received the funds they were due from an annuity. Between November 1996 and November 2011, Mr. Short was registered with Wells Fargo. In October 2006, while Short was registered with Wells Fargo, a firm customer executed a will naming Mr. Short as executor. When the customer passed away in November 2008, Mr. Short petitioned the court and was appointed executor of the client’s estate. As executor, Mr. Short facilitated the pay out on three of the client’s annuities. For one of the annuities, the client’s estate was a 10% beneficiary and a local foundation, which was also a Wells Fargo customer, was a 90% beneficiary.

Aug 22, 2016

Former Miami UBS Financial Representative Suspended for Unauthorized Trading

James Scullin of Miami, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly placing an unauthorized trade in a customer’s account in violation of FINRA Rule 2010. Mr. Scullin was a general securities representative for FINRA member firm UBS Financial Services (UBS) from June 2011 through November 2014. FINRA Rule 2010 reads that “a member, in the conduct of his business, shall observe high standards of commercial honor and just and equitable principles of trade.” In mid-2011, Mr. Scullin became a registered representative at UBS for the account of a firm customer. FINRA investigators found that on or about September 12, 2014, Mr. Scullin placed a $5,000,000 trade without informing the two individuals with authority to place trades in the customer account or seeking their authorization. Mr. Scullin did not have discretionary authority for any of the customer’s accounts.

Aug 19, 2016

Dalton Strategic Representative Barred for Unsuitable Investment Recommendations

Michael DeBoer of Trinity, Florida submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Department of Enforcement of the Financial Industry Regulatory Authority (FINRA) for allegedly not disclosing his participation in a transaction that recommended customers make an unsuitable securities transaction. Mr. DeBoer was registered with former FINRA member firm Dalton Strategic Advisors Investment Services Inc. (Dalton Strategic) from November 2009 to April 2013. In June 2010, while registered with Dalton Strategic, Mr. DeBoer recommended that two customers invest a total of $200,000 in securities offered by a software development company. Mr. DeBoer received $32,000 in commissions for the securities transaction. However, the investors ultimately lost the entirety of their investments in the securities. FINRA alleged the securities were not offered through Dalton Strategic, and Mr. DeBoer did not disclose his participation in the transactions to his associated firm. FINRA further alleged that before making his recommendation, Mr. DeBoer also failed to reasonably investigate the software company or its securities and therefore lacked a reasonable basis to believe the securities were suitable investments for his clients.

Aug 16, 2016

FINRA Fines and Suspends Deutsche Bank Broker Gregory Barr for Discretionary Trade Violations

Gregory Barr., a Boca Raton, Florida based broker formerly employed with Deutsche Bank Securities, Inc. (Deutsche Bank) and Raymond James & Associates, Inc. (Raymond James), submitted a letter of Acceptance, Waiver, and Consent in which he consented to, but did not admit to or deny, the Financial Industry Regulatory Authority’s (FINRA) findings that he entered discretionary trades in the accounts of four customers without the necessary prior written customer authorization. FINRA found that while employed as a General Securities Representative with Deutsche Bank, Gregory Edward Barr exercised discretion in four of his customers’ accounts. He placed sell orders for the customers in the same stock. Although these customers had allegedly given Mr. Barr verbal authorization to sell their positions if the stock decreased in price, he allegedly failed to discuss the transactions with his customers on the day of the sell orders. FINRA further alleged Deutsche Bank had not approved the customers’ accounts for discretionary trading. Therefore, none of the accounts had been approved for the discretionary trades made by Mr. Barr.