January, 2017: FINRA announces Debbie Sue Arnold Barred for violating FINRA Rule 9552
Debbie Sue Arnold, a registered representative from Albany, Ohio, formerly with Farmers Financial Solutions was suspended from FINRA membership for violations of Rule 9552
Marian Young of Saving2Retire barred from selling investments by California’s Department of Business Oversight
On March 24, 2016 the State of California’s Department of Business Oversight issued a bar order, denying Marian Young of Saving2Retire permission to act as an investment advisor or a broker dealer in California. The Order also denied Savings2Retire’s Investment Advisor application. The denial relates back to a November, 2015 statement of issues filed by the Commissioner that lays out Marian Young and Saving2Retire’s history of selling investments and providing investment advice in California. The November 2015 statement of issues was brought to deny Saving2Retire’s investment advisor application, and to bar Marian Young from acting as, or working for a broker dealer or investment advisor in California.
The denial and bar order sets forth Marian Young’s history with both the commission and the SEC, including the registration of her prior firm; Young Capital Growth Company, and the SEC and Commission’s correspondence with Young over deficiencies in her application for licensing. According to the statement of issues, Young refused to cooperate with the SEC when the agency asked for information, and also failed to answer questions posed by the Commission during its routine investigation into licensing. The statement also sets forth misrepresentations made by Young on the form ADV, including falsely claiming she was a certified financial planner. When pressed on these issues, Young removed all reference to such licensing.
Marc Sarner of Beacon Financial Advisory Services Hit with Cease and Desist Order by California’s Department of Business Oversight
On June 30, 2016 the State of California’s Department of Business Oversight issued a cease and desist order against Marc Sarner of Beacon Financial Advisory Services over allegations he participated in two unqualified offerings of securities to California residents. The claim relates to the offering of securities in “Image Development” a California company that was issuing bonds in order to purchase distressed real estate, as well as an offering by Usee Corp, a Texas company selling stock and promissory notes to raise money to fund its internet video-phone business.
According to an order issued in December, 2015, Sarner persuaded several of his clients to cash out annuities to purchase Image Development securities which he described as “conservative investments.” The clients incurred significant surrender penalties when redeeming the annuities. Sarner also solicited his clients to invest in Usee’s securities for which he received sales commissions of ten percent. Neither Image Development nor Usee were successful ventures, and neither returned the investors’ principal.
Derrick Stephens, D Stephens Management and Consulting, Lola Korneevets Hit with Cease and Desist Order by California’s Department of Business Oversight
On June 22, 2016 the State of California’s Department of Business Oversight issued a cease and desist order against Derrick Stephens and D Stephens Management and Consulting over allegations they participated in an unqualified offering of securities to California residents. Also named in the desist order was Olena Korneevets aka Lola Korneevets. D Stephens Management and consulting had been the subject of a 2008 desist order issued by the Department of Business Oversight.
The present desist order relates to the offer and sale of investment contracts (securities) with a purported return of over 20%, guaranteed by Stephens. According to the desist order, the investor was told that the only way he wouldnt get his principal returned was if the entire United States financial system collapsed. the investor was also not told about the existence of the 2008 desist order, a material omission of fact. The order also alleges that D Stephens Management and Consulting and Derrick Stephens offered and sold unqualified securities, as the investment contracts were neither qualified for sale, nor exempt from qualification.
The State of California stripped Eric Grace of his ability to legally sell investments in California
On May 18, 2016 Eric Grace, a former registered representative and investment advisor with Grace Capital Management of Torrance, CA was barred from acting as an investment advisor or broker dealer by the California Department of Business Oversight
The State of California earlier in the year had filed an accusation against Eric Grace, after he refused to provide them information relating to his business with Grace Capital Management. The state had demanded access to Grace Capital Management’s offices for a routine examination in December, 2015 but found it closed. They then left voice messages with Grace Capital Management, and sent certified letters, but received no response.
Paul Moore Coast Capital Management Hit with Cease and Desist Order by California’s Department of Business Oversight
On May 18, 2016 the State of California’s Department of Business Oversight issued a cease and desist order against Paul Moore of Coast Capital Management over allegations they participated in an unqualified offering of securities to California residents. The claim relates to an offering of securities in Paul Moore’s Coast Capital “Hedge fund” which sought outsized returns using high risk securities such as derivatives and options.
The Desist order states that beginning in October, 2010 Paul Moore sold interests in Coast Capital, which was an unqualified offering of securities. The order further states that the sale of securities was done via misrepresentations of material facts and omissions of material facts, including misrepresentations about Paul Moore’s investment management experience and success, and how the funds raised by Paul Moore and Coast Capital would be used. According to the allegations made by the Commissioner, Moore used funds raised in the offering in a manner inconsistent with prudent investment management, including using the funds to pay personal expenses.
James Duhon and Source Capital Hit with Cease and Desist Order by California’s Department of Business Oversight
On October 10, 2016 the State of California’s Department of Business Oversight issued a cease and desist order against Source Capital and James Duhon over allegations they participated in an unqualified offering of securities to California residents. The claim relates to an offering of securities in oil and gas programs overseen by the Blue Ridge Group, and includes the Belmont Drilling Program, the Galveston Bay Drilling Program and three other oil and gas drilling programs sold by among others, James Duhon and Source Capital. The order also alleges that Source Capital and James Duhon offered and sold unqualified securities to the public by way of material omissions of fact.
The Commissioner alleges that from September 2010 through November, 2012, James Duhon and Source Capital sold oil and gas securities to investors without those securities being qualified for sale, and by way of either material omission of fact or through material omissions, including the rate of return that investors could expect from the programs managed by Blue Ridge Group. One California based investor was told he could receive his money back any time he asked for it, which the Commissioner found to be materially inaccurate.
Five Star Financial Hit with Cease and Desist Order by California’s Department of Business Oversight
On August 9, 2016 the State of California’s Department of Business Oversight issued a cease and desist order against Five Star Financial (dba JBAH Insurance Solutions) and its control persons and officers Anna Holt and John Biyikoglu over charges that they sold securities to the public in the form of “JPMorgan Structured Investments” without being registered as a broker dealer, and by way of material ommisions of fact.
The Commissioner’s cease and desist order alleges that in 2014, Five Star Financial, through its control persons Anna Holt and John Biyikoglu sold JPMorgan Structured Investments to California residents promising a return of between sixteen and twenty percent. Upon receiving the funds from the investors, the company deposited the funds into an account where they were commingled for non investment purposes such as paying for general operating expenses, paying sales commissions and personal expenses, and repaying investors from other transactions. The Commissioner further alleges that Biyikoglu told investors that their funds had increased in value, when in fact the money had been spent by Five Star Financial, rather than invested as described to the investors.
Robert Estevez suspended by FINRA
In September, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Robert Estevez of Greenwich, CT, a registered representative with Joseph Gunnar and Company submitted an acceptance, waiver and consent letter whereby he was suspended from association with any FINRA member in any capacity for two months and ordered to pay a fine of $20,000. The FINRA complaint asserted that Robert Estevez recommended steepeners to his clients, which are highly complicated synthetic investment products that attempt to measure and profit from the difference between long term and short term interest rates.
The market for steepeners is illiquid, making their use unsuitable for most customers. FINRA found that Estevez recommended a short term trading strategy using steepeners, which, given their illiquid nature, resulted in losses when the clients were unable to recoup their original purchase price.
Joey Broussard barred by FINRA
In November, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Joey Broussard of Princeton, Texas, a registered representative formerly with Source Capital Group and Red River Securities was barred from association with any FINRA member in any capacity. The FINRA findings stated that a customer to whom Broussard had sold a limited partnership interest submitted a letter attempting to cancel the transaction. Broussard, without the customer’s knowledge or permission, then submitted a letter cancelling the recission request, forging the customer’s signature in the process.
Registration and disciplinary history
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