Articles Posted in Disciplinary Actions

Caldwell International Securities Charged by FINRA with sales practice violations.

In a complaint filed by the FINRA Department of Enforcement on December 16, 2105 Caldwell International Securities of Fisher, TX and its principal owner Greg Caldwell, Lennie Freiman, its president, chief compliance officer Paul Jacobs, along with registered reps Alain Florestan, Alex Etter, Lucas Lichtman, Richard Lim and Richard Lee were charged with sales practice and supervisory violations.  The allegations include charges that the reps made unsuitable recommendations to customers, engaged in over aggressive trading for the purpose of generating commissions and failed to disclose risk to customers.  FINRA accused the supervisors of failing to monitor and detect wrongdoing, which resulted in over one million dollars of client losses while generating over a million dollars in commissions.

The claim filed by FINRA is not final, and until the allegations have been proven in a court of law, no adverse inferences should be drawn.

FINRA bars Stifel broker Andy Quinn.

In February, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Andy Quinn of Reno, NV, formerly working out of Stifel Nicolaus’ Reno office was barred from association with any FINRA member in any capacity for borrowing money from an elderly widow, then defaulting on the repayment obligations.  FINRA also found that Quinn refused to cooperate with the investigation, and that in responding to his firm’s annual compliance questionnaire, Quinn failed to disclose the existence of the loan, a violation of firm policy.

Registration and disciplinary history

Besty Marcom suspended four months

In February, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Betsy Marcom of Georgetown, TX, formerly with Next Financial Group of Georgetown, TX submitted an acceptance, waiver and consent letter whereby she was suspended from association with any FINRA member in any capacity for four months and fined $15,000. The FINRA complaint alleged that Marcom made unsuitable investment recommendations to her clients by concentrating their account in non-investment grade corporate bonds.  The client, a church, suffered over $100,000 in losses due to the over concentration of their account in these risky investments.

Registration and disciplinary history

FINRA suspends Charles Laverty.

In February, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Charles Laverty of Newport Beach, CA, formerly with Oppenheimer and Co. and Calton & Associates submitted an acceptance, waiver and consent letter whereby he was suspended from association with any FINRA member in any capacity for eighteen months. The FINRA complaint alleged that Laverty borrowed over one million dollars from his customers  without obtaining permission from his firm.  One of the loans remains outstanding. FINRA also found that Laverty failed to report the loans on his annual compliance questionnaires.

Registration and disciplinary history

Finra bars Rick Esparza

In February, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Rick Esparza of Rancho Murieta, CA, formerly with Princor Financial Services of Rancho Murieta, CA submitted an acceptance, waiver and consent letter whereby he was barred from association with any FINRA member in any capacity. The FINRA complaint alleged that Esparza failed to cooperate with FINRA during its investigation into whether Esparza borrowed money from a firm customer, a violation of firm policy and FINRA rules.

Registration and disciplinary history

Larry Crabtree suspended.

In February, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Larry Crabtree of Edmund, OK, of Wilbanks Securities of Edmund, OK submitted an acceptance, waiver and consent letter whereby he was suspended from association with any FINRA member in any capacity for a period of six months. The FINRA complaint alleged that Crabtree made unsuitable investments in a customer’s IRA and that he improperly exercised discretion in the account without obtaining written approval to do so.

Registration and disciplinary history

Lincoln Financial fined by FINRA.

In February, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Lincoln Financial Advisors of Ft. Wayne, Indiana submitted an acceptance, waiver and consent letter regarding its failure to effectively implement a reasonable penny stock supervisory system designed to achieve compliance with the securities laws. In agreeing to the AWC, the firm was fined $90,000.

FINRA’s allegations against Lincoln Financial Advisors concerned a registered rep who made a series of penny stock transactions in amounts under $5,000.  By structuring the transactions in such small increments, the rep was able to evade detection by management. FINRA’s allegations concerned the firm’s failure to act on the numerous penny stock transactions submitted by the rep, and the failure to put the pieces together to see that the rep was structuring the transactions to evade detection by the firm.

Liberty Associates fined.

In February, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Liberty Associates New York, NY submitted an acceptance, waiver and consent letter regarding its failure to effectively implement a reasonable supervisory system designed to achieve compliance with the securities laws. In agreeing to the AWC, the firm was fined $3,500.

FINRA’s allegations against Liberty Associates concerned a registered rep working out of its New Mexico office who was engaged in the sale of private placements.  FINRA’s allegations concerned the firm’s failure to conduct due diligence into the offerings, and the failure to determine whether the investors in the private placements were accredited investors.  FINRA also took issue with the firm’s failure to retain emails.

Finance 500 fined $500,000.

In February, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Finance 500 of Irvine, CA submitted an acceptance, waiver and consent letter regarding its failure to effectively implement an anti-money laundering compliance program into its securities business. In agreeing to the AWC, the firm was fined $500,000.

FINRA’s allegations against Finance 500 concerned its participation in the trading of low priced securities.  The firm did not implement a supervisory system designed to identify red flags in the trading of low priced securities, which allowed registered reps to open accounts without properly identifying the account holder’s information.  The findings also criticized Finance 500 and its CEO Robert Hicks for failures in its market making activities in low priced securities, sales of unregistered securities, and its failure to review and retain email communications.

Robert Dull suspended.

Robert Dull, a registered representative formerly with Suntrust Investment Services and Securities America was suspended from FINRA membership for violations of Rule 9554.

FINRA Rule 9554. Failure to Comply with an Arbitration Award or Related Settlement or an Order of Restitution or Settlement Providing for Restitution