Articles Posted in Disciplinary Actions

FINRA charges Rusty Tweed over fund transactions.

On April 27, 2017 FINRA charged Rusty Tweed of Glendale California, a registered representative with Cabot Lodge Securities and formerly with Concorde Investment Services with making misstatements to investors in connection with a private placement in a company that utilized a computerized trading strategy.  FINRA alleges that Tweed’s conduct violated section 17 of the Securities Act of 1933.

FINRA’s complaint alleges that Tweed received over one and a half million dollars from his broker dealer clients using a false and misleading private placement memorandum.  The transaction involved an investment fund controlled by Tweed that utilized computerized trading  to make profits from the stock market.

Source Capital Group’s Don Saccomano suspended by FINRA.

Don Saccomano, a registered representative from Norwalk, Connecticut, formerly with Janney Montgomery Scott and Source Capital Group was suspended from FINRA membership as a result of failing to cooperate with a FINRA investigation.

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

FINRA bars former Park Avenue Securities broker William Roe.

William Roe, a registered representative from Fontana, California, formerly with Park Avenue Securities and Crowell Weadon was barred from FINRA membership as a result of failing to cooperate with a FINRA investigation.

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

CFP Board Disciplines Sharon Fall.

In October, 2016 the Certified Financial Planner Board’s Commission of Discipline and Ethics announced the discipline of former LPL Financial, International Assets Advisory and Simplicity Wealth rep Sharon Fall by issuing a permanent bar and a prohibition against her using the CFP designation and certification.  Fall, of Chester, Maryland had failed to file an answer to the CFP Board’s complaint seeking answers on her FINRA bar, and her terminations from two FINRA broker dealers.

The CFP Board was seeking to investigate Fall’s recent history in the securities industry. Their complaint alleged that Fall had been terminated from a member firm for borrowing money from clients, had been terminated from another firm for communicating with clients before her license was approved, and had been barred by FINRA for refusing to cooperate into a FINRA investigation that she had improperly borrowed money from clients.   In addition, the state of Maryland filed an administrative proceeding against Fall alleging that she engaged in dishonest and unethical conduct by borrowing money from clients.  The action resulted in a licensing bar and a $15,000 fine

Richard Sampley suspended by FINRA.

In December, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Richard Sampley of Atlanta, Georgia, a registered representative formerly with Raymond James, Morgan Keegan and UBS Financial submitted an acceptance, waiver and consent letter whereby he was suspended from association with any FINRA member for ten months, and assessed a fine of $15,000.

The FINRA complaint asserted that Richard Sampley participated in private securities transactions in a renewable energy company without getting prior written permission from his member firm.  The AWC detailed Sampley’s involvement in the transactions such as arranging for clients to receive warrants to purchase shares in the company, and his receipt of compensation, and use of firm resources to facilitate the transactions.

Pete Lappin suspended by FINRA

In December, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Pete Lappin of Las Vegas, Nevada, a registered representative formerly with MetLife Securities,  New England Securities and Wedbush Securities submitted an acceptance, waiver and consent letter whereby he was suspended from association with any FINRA member for three months, and ordered to pay restitution to customers.    The suspension was effective October, 2016 through January, 2017

The FINRA complaint asserted that Pete Lappin recommended unit investment trusts to clients using an unsuitable short term strategy that increased the costs to his customers. UITs are designed to be longer term investments, and FINRA found that Lappin’s clients held the UITs for a little over three months, thereby increasing costs, and in some cases, causing losses.

Kenley Brisard barred by FINRA.

In December, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Kenley Brisard of Weston, Florida, a registered representative formerly with Ridgeway & Conger and Gunn Allen Financial submitted an acceptance, waiver and consent letter whereby he was barred from association with any FINRA member in any capacity.

The FINRA complaint asserted that Kenley Brisard participated in an unregistered offering of securities and made material misrepresentations about the investments.  The investments sold by Brisard and another registered rep were “interest only strips” from loans issued by the Small Business Administration.  FINRA found that Brisard improperly marketed the securities using a “general solicitation” which contained false information that was contradicted by the prospectus for the underlying securities.  In March, 2016 Ridgeway and Conger discharged Brisard for selling unsuitable investments and charging excess commissions to his customers.

Michael Babyak barred by FINRA

In December, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Michael Babyak of Randolph, New Jersey, a registered representative formerly with Leigh Baldwin and LPL Financial submitted an acceptance, waiver and consent letter whereby he was barred from association with any FINRA member in any capacity.  The FINRA complaint asserted that Michael Babyak participated in private securities transactions with firm customers without obtaining prior permission or approval.  These clients invested over four million dollars into a company set up by Babyak.  LPL financial discharged Babyak once it discovered the transactions, citing firm policy prohibiting soliciting unapproved investments or engaging in loan transactions with customers.

Registration and disciplinary history

FINRA fines Fenix Securities

In December, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Fenix Securities of New York, NY submitted an acceptance, waiver and consent letter regarding its failure to register foreign associates prior to their placing orders on behalf of customers.  As a result the firm was censured and fined $30,000.

FINRA’s allegations against Fenix Securities concerned the firm’s practice of permitting unregistered foreign associates to conduct firm business by opening accounts and making transactions on behalf of off shore investors.  FINRA found that several of these individuals were not registered in any capacity, while some were registered in their home jurisdiction but not with FINRA.

FINRA fines Houlihan Capital.

In December, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Houlihan Capital of Chicago, IL submitted an acceptance, waiver and consent letter regarding its participation in a five million dollar private placement of securities.  The firm was censured and fined $25,000.

FINRA’s allegations against Houlihan Capital concerned the firm’s creation and dissemination of marketing materials for the convertible promissory notes offered by the firm.  The AWC stated that the firm disseminated written materials that did not present a balanced view of the offering and later, when certain information in the offering materials became untrue, the firm did not provide a written update.  The AWC found that the offering materials omitted material information, contained out of date information and contained false, exaggerated and misleading information.