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October 30, 2015

Howard Isaacson suspended from FINRA membership

Howard Isaacson a registered representative formerly with Merril Lynch of Naples, FL 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

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 August, 2015 Howard Isaacson was suspended from FINRA membership for violating Rule 9554.

October 30, 2015

Nigel Graham suspended from FINRA membership

by David Liebrader

Nigel Graham a registered representative formerly with PNC Investments of Clinton, MD 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

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 August, 2015 Nigel Graham was suspended from FINRA membership for violating Rule 9554.

October 30, 2015

Michael DiPietro suspended from FINRA membership

by David Liebrader

Michael DiPietro a registered representative formerly with Transamerica Financial in Pasadena, CA 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

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 August, 2015 Michael DiPietro was suspended from FINRA membership for violating Rule 9554.

October 30, 2015

Zachary Bader FINRA Membership Suspended

by David Liebrader

Zachary T. Bader a registered representative formerly with National Securities Corporation 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

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 August, 2015 Zachary Bader was suspended from FINRA membership for violating Rule 9554.

October 30, 2015

Deepal Wannakuwatte ordered to pay $100 million in restitution

by David Liebrader

On March 5, 2015 a federal judge ordered Deepal Wannakuwatte to pay over $100 million in restitution to the victims of his decade long ponzi scheme. In November of last year Deepal Wannakuwatte was sentenced to 20 years in prison and ordered to forfeit multiple properties, vehicles, business interests, and bank accounts to be used to provide restitution to victims.

According to court documents, from 2002 to 2014, Wannakuwatte obtained well over $230 million from his victims, some of which he returned to them as “fake” profit payments. Most of the money raised was used by Deepal Wannakuwatte to pay himself and his family and pay outstanding debts unrelated to his false representations.

Wannakuwatte offered his investors several different bogus high-yield investment opportunities, and closed the sales by touting his relationship to the VA, and by showing his victims phony corporate documents, fraudulent tax returns, and bogus sales documents.

October 29, 2015

Feltl and Company

by David Liebrader

In August 2014, Feltl and Company signed a letter of Acceptance, Waiver, and Consent (“AWC”) in which FINRA alleged multiple failures by the firm between 2008 and 2012 concerning Feltl’s penny-stock business, including deficiencies in the firm’s supervisory procedures.

FINRA alleged that Feltl failed to comply with suitability, disclosure, and record-keeping requirements, by for example, not providing certain of its customers with standardized risk disclosure documents two days prior to effecting penny stock transactions in customers’ accounts.

This industry approved risk disclosure document describes the nature and level of risk in the penny stock market and a broker-dealer’s duties to its customers.

October 26, 2015

Kenneth Graves

by David Liebrader

Kenneth Graves, a former investment adviser representative in Corpus Christi whose license to sell securities was revoked last year by the Texas Securities Commissioner, was arrested June 15 after having been indicted in Nueces County on fraud and other charges. The indictment alleges that Kenneth Graves defrauded six clients of his firm, Warren Financial Services LLC, through the sale of $420,720 in investment contracts based on his firm’s gross income. In a separate scheme, Graves allegedly misapplied $128,918 in unreasonable fees he charged clients of his firm. The Securities Commissioner’s order revoking the registrations of Kenneth Graves and Warren Financial found that Graves made unauthorized withdrawal of client funds, recommended unsuitable investments, and failed to pay clients their promised return on investment.

Kenneth Graves’ registration and disciplinary history

Kenneth Graves was registered with the following firms

October 26, 2015

Tracy Spaeth

by David Liebrader

Tracy Spaeth, a former investment adviser representative in Lubbock, pleaded no contest to the sale of unregistered securities on Dec. 4, 2014, in Lubbock County State District Court. Spaeth’s sentence was suspended and he was placed on eight years of community supervision. The Texas Securities Commissioner entered a Disciplinary Order in 2013 that suspended Tracy Spaeth for two years and ordered him to complete restitution payments to clients.

Tracy Spaeth’s registration and disciplinary history

Tracy Spaeth was registered with the following firms

October 26, 2015

Citivest Residential Income and Total Return Fund

by David Liebrader

On July 17, 2015 the California Department of Business Oversight obtained a desist and refrain order against the Citivest Residential Income and Total Return Fund.

The Order found that beginning on or about May 31, 2013, Citivest Residential Income and Total Return Fund, LLC offered and sold securities in the form of membership shares without obtaining a permit or other form of qualification authorizing any person to offer the securities in California. Additionally, the Fund failed to file the Form D exemption notice, consent to service of process, and filing fee with the California Securities Commissioner pursuant to Corporations Code section 25102.1, subdivision (d). Nor did the Fund file a Form D exemption notice with the Securities and Exchange Commission with respect to its various securities offerings as required by federal law (17 C.F.R. §230.503 (2014)).

Based upon its findings, the California Commissioner of Business Oversight concluded that the membership interests offered and sold by Citivest Residential Income and Total Return Fund, LLC were securities subject to the requirements of Corporations Code section 25102.1, subdivision (d), of the Corporate Securities Law of 1968 (Corporations Code section 25000 et seq.).

October 26, 2015

Robert Herget

by David Liebrader

On July 14, 2015 the Wisconsin Department of Financial Institutions issued an Order to Cease and Desist and to Deny Agent and Investment Adviser Registration to Robert Herget and Herget Group LLC.

Robert Herget’s application was denied based on findings that Herget violated Wis. Stat. § 551.501 (as well as the failure to disclose the investigation of this misconduct in Herget’s application for registration), pursuant to Wis. Stats. §§ 551.604 and 551.412.

The Dept. of Financial Institutions ordered Herget to cease and desist from further offers of unregistered securities in Wisconsin and also denied Herget’s application for registration as a securities agent and investment adviser representative.