Securities Fraud Lawyer Blog

Christopher Hawn, a registered representative from Furlong, Pennsylvania, formerly with Alps Distributors, was fined and suspended from FINRA membership as a result of an investigation into allegations that he participated in private securities transactions without obtaining firm approval. Doing so is a violation of FINRA rules. As a result of the investigation Christopher Hawn entered into an acceptance waiver and consent agreement with FINRA in which he neither admitted nor denied the findings, but agreed to a suspension of six months and a fine of $10,000.

In June 2017, Christopher Hawn agreed to the suspension and FINRA published its findings that Hawn failed to inform his broker dealer about his private securities transaction dealings.  Hawn had provided an investment opportunity to his uncle and one of his friends, and they invested approximately $100,000 in the transactions.  FINRA found that Hawn gave out investment information and advertising materials on the deal that had not been approved by FINRA.  These materials failed to disclose the risks inherent in the deal. Such disclosures are important, as they could impact investors’ financial returns.

FINRA also found that Hawn failed to properly disclose his private business dealings to his broker dealer Alps Distributors, and falsified certifications that stated Alps knew about and approved his outside activities.

Kejaun Yang, a registered representative from Woodside, New York, formerly with T3 Trading Group, was suspended from FINRA membership as a result of an investigation into her participation in private securities transactions without obtaining her firm’s prior approval, which is a violation of FINRA rules. Yang entered into an acceptance waiver and consent agreement with FINRA in which she neither admitted nor denied the findings, but agreed to a suspension of 30 business days and a fine of $5,000.

In June 2017, Yang agreed to the suspension and FINRA published its findings that Yang contacted individuals in order to sell them investments in a real-estate private placement. Yang did not get prior written approval from her firm about the investment opportunity or her involvement with it.

FINRA found that one of Kejuan Yang’s clients invested $10,000 in the private opportunity but Yang did not benefit from any compensation from the offering. Nevertheless she was fined and suspended because her firm did not approve of her involvement in the business, and purportedly did not have any record of her dealings.

Richard Botkin, a registered representative from Granite Bay, California, with Stifel, Nicolaus & Company and formerly with Morgan Stanley, was suspended from FINRA membership as a result of an investigation into his participation in private dealings without obtaining his firm’s approval, which is a violation of FINRA rules. Botkin entered into an acceptance waiver and consent agreement with FINRA in which he neither admitted nor denied the findings, but agreed to a suspension of four months and a fine of $15,000.

In May 2017, Richard Botkin agreed to the suspension and FINRA published its findings that he took part in private securities transaction without telling his firm or getting their approval. He sold shares in a production company to create a documentary film and approached his own customers from the firm to invest money. His firm prohibited customers from dealing in private transactions with him, but he approached them anyway.

Four of the firm’s customers invested a total of $170,000 and other customers invested $75,000. FINRA also found that Botkin lied to his firm about his participation in this investment dealing when asked about it.

Andrew Logullo, a registered representative from Los Angeles, California, formerly with Ameritas Investment Corp., was suspended from FINRA membership as a result of an investigation into his ownership of discretionary accounts with members of another firm, which is a violation of FINRA rules. Logullo entered into an acceptance waiver and consent agreement with FINRA in which he neither admitted nor denied the findings, but agreed to a suspension of six months and a fine of $10,000.

In May 2017, Andrew Logullo agreed to the suspension and FINRA published its findings that he did not tell his firm about his discretionary trading authority that he had with three investors at another firm. He did not provide correct authorization of his accounts with these investors and did not give written notice to his firm about his outside dealings with them. Logullo did not tell his clients that he was registered with FINRA at his current firm, but instead had them give him discretionary authority over their accounts and investments.

FINRA found that Andrew Logullo also had dealings as a president and agent at another firm that allowed him to give investment consulting advice to clients. His FINRA-registered firm was not told of this outside business, and claims not to have known about any of his roles outside of their firm.

Financial West Investment Group fined over private placement escrow accounts.

In June 2017, the Financial Industry Regulatory Authority (FINRA) announced that Financial West Investment Group of Westlake, California, submitted an acceptance, waiver and consent letter, or AWC, regarding its participation in private placement offerings without the use of an escrow account. The firm was censured and fined $20,000.

FINRA’s allegations against Financial West Investment Group concerned the firm’s role in collecting and placing private placement securities without the use of an escrow account, which is a violation of industry rules. The AWC stated that the firm did not designate an account to receive the funds, and instead sent checks from the investors directly to the issuer. Such actions violate not only the firm’s Written Supervisory Procedures but also the Securities Exchange Act of 1934.

Coastal Equities fined $15,000.

In June 2017, the Financial Industry Regulatory Authority (FINRA) announced that Coastal Equities Inc. of Wilmington, Delaware, submitted an acceptance, waiver and consent letter, or AWC, regarding its failure to supervise firm sales of non-traditional ETFs, or exchange-traded funds. The firm was censured and fined $15,000.

FINRA’s allegations against Coastal Equities Inc. concerned the firm’s lack of controls and oversight in the sale of multiple types of exchange-traded funds. ETFs are liquid, and are traded like stock on the exchange. Coastal Equities Inc. is supposed to have procedures in place to require that every new product offered and sold is understood by their brokers. According to FINRA, Coastal Equities failed to implement and enforce such written procedures.