Articles Posted in Disciplinary Actions

In May, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Oakbridge Financial Services of Kirkwood, Missouri submitted an acceptance, waiver and consent letter regarding supervisory lapses in its securities business. In agreeing to the AWC, the firm was fined $20,000. The AWC can be found here.

FINRA’s allegations against Oakbridge included that the firm failed to supervise the outside business activities of its registered representatives. FINRA contended that the firm did not document and review the trading in “church bonds” to ensure that the trades were suitable for, and sold at a fair price to the firm’s customers.

Oakbridge Financial Services’ registration and disciplinary history

In May, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Lombard Securities, Inc. of Baltimore, Maryland submitted an acceptance, waiver and consent letter regarding supervisory lapses in its securities business. In agreeing to the AWC, the firm was fined $50,000. The AWC can be found here.

FINRA’s allegations against Lombard Securities included that the firm failed to implement a supervisory system designed to prevent unsuitable mutual fund switching and the sale of inverse and leveraged exchange traded funds.  FINRA found the firm’s supervisory system unreasonable which caused it to fail to detect the violations.  .

FINRA also found that the firm failed to provide clients with sales charge discounts in their sales of unit investment trusts.

David Seigerman, a registered representative from Morristown, NJ, formerly with Janney Montgomery Scott and Morgan Stanley 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

The rule provides that a registered representative or a firm that fails to comply with a FINRA arbitration award or a settlement agreement entered into as a result of a FINRA arbitration or mediation proceeding, shall have their license suspended 21 days after notice of the intent to suspend has been sent.  In April, 2016 David Seigerman was suspended from FINRA membership for violating Rule 9554.

Rudy Luo, aka Jaoshiang Luo, a registered representative in Flushing, NY, formerly with Clark Dodge & Co., Andrew Garrett and Buckman, Buckman and Reid was suspended from FINRA membership for violations of Rule 9552

FINRA Rule 9552. Failure to Provide Information or Keep Information Current

This FINRA rule provides if a FINRA member fails to provide information or testimony requested or required by FINRA’s By-Laws or FINRA rules, or fails to keep his or her membership and supporting documents current, FINRA, after providing  21 days’ notice may suspend the FINRA membership of the person.

Demetrios Hallas, a registered representative formerly with Aegis Capital, Santander Securities and Forefront Capital was suspended from FINRA membership for violations of Rule 9552

FINRA Rule 9552. Failure to Provide Information or Keep Information Current

This FINRA rule provides if a FINRA member fails to provide information or testimony requested or required by FINRA’s By-Laws or FINRA rules, or fails to keep his or her membership and supporting documents current, FINRA, after providing  21 days’ notice may suspend the FINRA membership of the person.

Kora Crowder, a registered representative formerly with Merrill Lynch in Jacksonville, Florida was suspended from FINRA membership for violations of Rule 9552

FINRA Rule 9552. Failure to Provide Information or Keep Information Current

This FINRA rule provides if a FINRA member fails to provide information or testimony requested or required by FINRA’s By-Laws or FINRA rules, or fails to keep his or her membership and supporting documents current, FINRA, after providing  21 days’ notice may suspend the FINRA membership of the person.

On May 24, 2016 the  Securities and Exchange Commission filed a complaint in Dallas, TX Federal Court charging investment advisor Ash Narayan formerly with RGT Capital Management, with secretly transferring over thirty three million dollars from his clients’ accounts to a company called The Ticket Reserve, which then funneled almost two million dollars back to Narayan in hidden compensation.

On June 21, 2016 the SEC announced the unsealing of the complaint, as well as an order freezing Ash Narayan’s assets, and appointing a Receiver to preserve The Ticket Reserve’s assets.

In their complaint the SEC alleges that the Ticket Reserve made distributions to existing investors using funds obtained from new investors in ponzi like fashion.  Other allegations include that former RGT Capital Management investment advisor Ash Narayan took his conservative minded investors’ (many of whom were successful professional athletes) portfolios and funneled their money into the Ticket Reserve without disclosing risks or conflicts of interest, including that Narayan sat on the Ticket Reserve’s board of directors.  Among the undisclosed conflicts of interest were that Narayan owned millions of shares of the Ticket Reserve’s stock, and that Narayan was paid finders’ fees for bringing his clients’ monies to the Ticket Reserve.

Travis Shannon, of Santa Barbara, a registered representative formerly with Morgan Stanley 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

The rule provides that a registered representative or a firm that fails to comply with a FINRA arbitration award or a settlement agreement entered into as a result of a FINRA arbitration or mediation proceeding, shall have their license suspended 21 days after notice of the intent to suspend has been sent.  In March, 2016 Travis Shannon was suspended from FINRA membership for violating Rule 9554.

Tom Ottman, of Blaine, MN, a registered representative formerly with Feltl & Company and Advanced Advisor Group 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

The rule provides that a registered representative or a firm that fails to comply with a FINRA arbitration award or a settlement agreement entered into as a result of a FINRA arbitration or mediation proceeding, shall have their license suspended 21 days after notice of the intent to suspend has been sent.  In March, 2016 Tom Ottman was suspended from FINRA membership for violating Rule 9554.

Karen Kane (aka Karen Knote), a registered representative from Carmel, IN formerly with Money Concepts Capital 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

The rule provides that a registered representative or a firm that fails to comply with a FINRA arbitration award or a settlement agreement entered into as a result of a FINRA arbitration or mediation proceeding, shall have their license suspended 21 days after notice of the intent to suspend has been sent.  In March, 2016 Karen Kane was suspended from FINRA membership for violating Rule 9554.