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On March 3, 2015 Norma Skeete of Arlington, Virginia, a former broker with PFS Investments of Camp Springs, MD was named in a FINRA complaint alleging that she made negligent misrepresentations to a PFS customer in connection with a loan that the customer made to a real estate company.

The complaint alleges that Norma Skeete failed to properly investigate the real estate company to verify the risks of the investment, and instead relied solely on the representations of the company’s officers. As a result, Skeete did not have a reasonable basis to recommend the investment. After the loan was made the customer sought updates, and when he wasn’t repaid on the loan Skeete reaffirmed that he would be repaid. As of the time of the filing of the complaint the customer had not been repaid.

Norma Skeete was a long time registered representative, and was licensed in the securities industry from 1983 – 2011.

On February 9, 2015 FINRA barred Michael Korson from the securities industry as a result of findings that Korson engaged in outside business activities in violation of FINRA rules.

Michael Korson’s bar relates to his sale of My Coupon Genie stock, which was a private securities transaction. FINRA found that Korson sold convertible debentures to his brokerage firm customers without obtaining permission from the firm.

Michael Korson had been licensed in the securities industry for 22 years, and was with PFS Investments from 1991- 2013. FINRA records show that Korson was permitted to resign from PFS Investments after the firm became aware of his sale of the My Coupon Genie securities to a firm customer. After leaving PFS, Michael Korson was briefly licensed with HBW Securities of South Lyon, Michigan before accepting a permanent bar from FINRA.

Michael Ciuffo, formerly of Sikich Corporate Finance of Naperville Illinois was suspended by FINRA for six months, form May 2015 through November, 2015. Michael Ciuffo consented to the suspension without admitting or denying that he participated in two private securities offerings without getting written permission from his broker dealer.

The FINRA findings also state that Michael Ciuffo falsely represented to his broker dealer that he was not engaging in these outside business activities a/k/a “selling away.

Michael Ciuffo has been licensed through FINRA since 1993 and this is the second regulatory action brought against him by FINRA.

On March, 26, 2015 Merrion Securities, LLC of Westfield, New Jersey was censured and fined $15,000 by FINRA. While neither admitting nor denying the findings, Merrion Securities consented to FINRA’s findings that Merrion Seurities failed to maintain investor funds in an approved fashion, by not depositing the funds into an approved escrow account. The matter referred to private securities offering by a company called Vir2us, which was looking to raise $2 million. Per FINRA rules, funds raised by a FINRA licensed broker dealer in an offering have to be deposited into a designated escrow account, and not comingled. Rather than do this, the findings state that Merrion Securities allowed the funds to be directed to the company, and then to an attorney’s trust account. When the Vir2us offering raised less than the $2 million contemplated, the company lowered the contingent offering amount to $1million, at which time Merrion Securities was obligated to terminate the the offering and return investor funds.

Merrion Securities’ registration and disciplinary history

Merrion Securities is registered with the SEC, FINRA and in 20 states.

On February 1, 2015 Douglas “Dutch” Melzer agreed to a permanent bar from the securities industry as a result of findings that he engaged in private securities transactions away from his brokerage firm, Wells Fargo Advisors

According to filings with FINRA Dutch Melzer introduced clients to a company called Aquatic Synthesis Unlimited, a company that his wife was affiliated with. Melzer received $27,000 as a result of these client transactions.

In August, 2013, after several spills the Pennsylvania Department of Environmental Protection revoked Aquatic Synthesis Unlimted’s permit, and levied on the company’s $1 million bond to use for cleaning up the spill site. According to news reports, the site contains 1 million gallons of shale wastewater and tons of contaminated soil.

On July 1, 2015 the Securities and Exchange Commission filed a complaint accusing former registered representative Malcolm Segal of operating a ponzi scheme that raised over $15 million by selling fake certificates of deposit.

According to the complaint filed by the SEC Segal began the scheme in 2009 by purchasing numerous CDs and instead of returning those proceeds to the investors, Segal used the funds for personal expenses, including a house in South Florida, and to make outsized ponzi like “interest” payments to his investors.

In 2011, Malcolm Segal changed brokerage firms and began soliciting investors to purchase fake CDs. Segal represented that his brokerage firm Aegis Capital sponsored the CD program.  To entice new investors, Segal increased the interest rates to 12% annually. By 2013, with investors seeking return of their principal, Segal ran out of new investors to fund the ponzi, and it collapsed. Before it did, the SEC alleges that Malcolm Segal began misappropriating funds from his customers’ accounts.

On May 6, 2015, FINRA reported that LPL Financial had been fined $10 million and censured for failing to supervise its sales force in their sales of non-traditional exchange-traded funds, variable annuities, non-traded REITs and other nontraditional investments

According to FINRA LPL failed to devote enough resources to their compliance department to review and approve the sales of these products, to adequately train their registered representatives, and to monitor the length of time customer’s held these complex ETF products.   As to the variable annuities, LPL permitted sales to occur without without disclosing surrender fees to the client. In settling this matter, LPL neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

LPL Financial is a registered broker dealer doing business in all fifty states. According to FINRA LPL has been the subject of 58 regulatory investigations and the firm discloses 50 arbitrations involving customers in its broker check CRD report.

On March 17, 2015 Kenneth Statly a broker with State Farm VP Management Corp of Grand Ledge, Michigan was barred from the securities industry by FINRA. Statly consented to the issuance of findings that he fabricated insurance claims for two customers in order to offset those customers’ insurance premiums. According to the findings, which Kenneth Statly neither admitted nor denied, Statly fabricated insurance claims, without the customers’ knowledge, and then issued the customers checks which he told the customers were reimbursements.

Kenneth Statly had been licensed with State Farm since 1998, and prior to his permanent bar from the securities industry, had not been the subject of any customer complaints.

Kenneth Statly’s registration and disciplinary history

In May, 2015 Farmer’s Financial Solutions registered representative Keilen Wiley of Houston, Texas was barred from the securities industry by FINRA. Wiley has appealed the decision to the SEC.

FINRA alleged that Keilen Wiley converted over $6,000 of insurance premiums entrusted to him by his clients by depositing the funds into his business bank account and using the funds for personal and business related expenses. FINRA also contends that Keilen Wiley provided FINRA with misleading answers during a formal on the record interview concerning this issue.

Keilen Wiley’s registration and disciplinary history

In March, 2013 FINRA regulated broker dealer Kalos Capital, Inc. was fined $45,000 as a result of failing to maintain and enforce an effective supervisory system that ensured emails sent between its clients and Kalos Capital’s brokers were reviewed and retained. FINRA alleged that the firm’s brokers who conducted business with customers outside of the firm used personal email addresses, rather than approved Kalos Capital email addresses. The risk of doing so is that such communications could contain recommendations to purchase products that are not approved by the broker dealer. Without proper systems in place to ensure that all emails were reviewed and retained, FINRA alleged that Kalos Capital maintained a deficient supervisory system, and fined the firm $45,000.

Kalos Capital is a broker dealer that sells alternative investments such as non-traded REITs, oil and gas programs, private placements and securities of business development companies. Many alternative investments are illiquid and charge high fees. All investors considering investing in alterative investments should carefully read the private placement memorandum for risks, conflicts of interest and fees. What may be sold as an alternative to stock market volatility could, in fact, be a high risk, highly leveraged investment.

Kalos Capital’s registration and disciplinary history