August, 2011:
Faran S. Kassam (CRD #4816180, Foreign Associate, London, England) was barred from association with any FINRA member in any capacity. The sanction was based on findings that Kassam failed to respond to FINRA requests for information and documents in connection with his sale of CDs. (FINRA Case #2010025127401).
August, 2011:
Richard Arnold Hansen (CRD #236308, Registered Principal, Villanova, Pennsylvania) submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Hansen consented to the described sanction and to the entry of findings that after receiving material non-public information concerning two companies, and knowing that the information had been misappropriated, he used the information in deciding to purchase and sell securities of those companies in accounts he controlled, thereby deriving illegal profits. (FINRA Case #2010024226001).
August, 2011:
Kirk Loring Gravelle (CRD #2580309, Registered Representative, Macclenny, Florida) was fined $10,000, suspended from association with any FINRA member in any capacity for five business days and required to requalify by examination. The sanctions were based on findings that Gravelle mismarked customer orders to buy securities as unsolicited when he had, in fact, recommended the purchase of the securities to customers. The findings stated that had Gravelle consulted his member firm’s No Solicitation List, he would have known that registered representatives were restricted from soliciting because conflicts could arise from activity within the firm’s investment banking department. The findings also stated that the list was updated throughout each day, and the firm’s WSPs required Gravelle to check the list on a daily basis. The findings also included that Gravelle’s entry of false information in connection with the trades rendered his firm’s books and records inaccurate. The suspension was in effect from July 5, 2011, through July 11, 2011. (FINRA Case #2008014712201).
FINRA complaint issued against the below described account executive:
Please keep in mind that the issuance of a disciplinary complaint represents FINRA’s initiation of a formal proceeding in which findings as to the allegations in the complaint have not been made, and does not represent a decision as to any of the allegations contained in the complaint. Because these complaints are unadjudicated, you may wish to contact the respondents before drawing any conclusions regarding the allegations in the complaint.
August, 2011:
Joshua Albert Galiani (CRD #2864225, Registered Representative, Pelham Manor, New York) was barred from association with any FINRA member in any capacity. The sanction was based on findings that Galiani engaged in an investment strategy that resulted in a principal loss of $662,108 in an elderly customer’s accounts and provided fictitious account documents to the customer to hide the substantial losses in the account. The findings stated that Galiani made material false oral representations to the customer concerning the value of his investments and repeatedly told the customer to disregard the confirmations and statements sent to him by Galiani’s member firm. The findings also stated that Galiani claimed that the majority of the customer’s money was held in a third account, which he described to the customer as an institutional account that was not reflected on documents sent by the firm. The findings also included that the customer subsequently demanded that Galiani provide him with statements for the institutional account; Galiani created and provided the customer with fictitious firm account summaries that overstated the customer’s actual holdings at the firm by approximately $600,000. FINRA found that on the same date, Galiani created and provided the customer with a fictitious account statement for the institutional account reflecting a purported value of $682,861.55. FINRA also found that the institutional account was a complete fabrication by Galiani; no such account existed and the account number listed on the institutional account statement was related to a closed account previously held by one of Gialani’s relatives. (FINRA Case #2009017619001).
August, 2011:
James Patrick Cross (CRD #1946579, Registered Representative, Nossegem, Belgium) was barred from association with any FINRA member in any capacity. The sanction was based on findings that Cross failed to respond to FINRA requests for information and documents regarding his sale of certificates of deposit (CDs). (FINRA Case #2010025127301).
August, 2011:
Martin Robert Coyne (CRD #2401192, Registered Representative, Pittsburgh, Pennsylvania) submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Coyne consented to the described sanction and to the entry of findings that he persuaded an elderly customer, in a meeting with the customer and a relative, to write a $50,000 check made payable to an affiliate of Coyne’s member firm and sign documents that purported to relate to a variable annuity investment, but Coyne never submitted the documents to his firm and the check was never cashed. The findings stated that in furtherance of his deception, Coyne misled the customer by informing him that the nonexistent variable annuity contract was deemed unsuitable for him due to his age and persuaded the customer to instead invest in Coyne’s non-existent company. The findings also stated that the customer, unbeknownst to his relative, wrote Coyne a $50,000 check payable to “cash,” which Coyne deposited into his personal bank account for the personal use of Coyne and his sibling, without the customer’s authorization. The findings also included that Coyne had the customer sign a bogus agreement that purported, among other things, to guarantee a signing bonus and the greater of a five percent return on investment of the amount earned based on a particular annuity product, for a minimum three-year investment, plus return of the principal invested, all purportedly tax-free. FINRA found that a few months later, the customer’s relative, still thinking that the customer had invested in a variable annuity, asked Coyne about the performance of the annuity, and Coyne several times provided the relative with fictitious annuity statements purporting to relate to the non-existent variable annuity investment. In addition, FINRA determined that by falsifying records, Coyne, in the conduct of his business, failed to observe high standards of commercial honor and just and equitable principles of trade. (FINRA Case #2011026880701).
August, 2011:
David Lee Cheviron (CRD #4031542, Registered Principal, Massillon, Ohio) submitted a Letter of Acceptance, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Cheviron consented to the described sanction and to the entry of findings that without permission or authority, he wrongfully converted a total of $75,331.08 from customers. The findings stated that Cheviron did so by withdrawing funds from a customer’s bank account and then took the funds to another branch of the bank, where he deposited the funds into his own personal account; he ultimately used the customer’s funds to make home improvements to his personal residence. The findings also stated that Cheviron’s member firm compensated the customer for the funds wrongfully taken from her account; Cheviron has not reimbursed his firm. The findings also included that Cheviron caused other customers to sign distribution requests to an insurance company with instructions to mail checks to Cheviron’s attention at several banks and his personal residence. FINRA found that upon receipt, Cheviron deposited these funds into his personal bank accounts and used the funds for his personal benefit. FINRA also found that in an effort to conceal that he was the beneficiary of the customers’ funds, Cheviron created false account statements, which he provided to one of the customers. (FINRA Case #2010022831701).
August, 2011:
Scott Thomas Brandt (CRD #1211417, Registered Representative, Woodland Hills, California) submitted a Letter of Acceptance, Waiver and Consent in which he was fined $67,909.21, which includes a $57,909.21 disgorgement of commissions received, and suspended from association with any FINRA member in any capacity for 18 months. The fine must be paid either immediately upon Brandt’s reassociation with a FINRA member firm following his suspension, or prior to the filing of any application or request for relief from any statutory disqualification, whichever is earlier. Without admitting or denying the findings, Brandt consented to the described sanctions and to the entry of findings that he provided written notice to his firm that he was engaged in sales of secured real estate notes outside the regular course and scope of his employment with the firm. The findings stated that at that time, the firm failed to recognize that the notes were securities and allowed Brandt to continue selling them without further supervision. The findings also stated that Brandt again disclosed his sales of the notes on his annual Outside Business Questionnaire (OBQ) form, following which the firm determined that the notes were actually securities and ordered him to stop selling the notes and remove any mention of note sales from his OBQ; Brandt subsequently submitted a new OBQ devoid of any mention of note sales. The findings also included that Brandt sold a note to a customer and received a commission of $3,459.21 for the sale although he failed to obtain the firm’s prior written approval to sell the note.
August, 2011:
Deutsche Bank Securities Inc. (CRD #2525, New York, New York) and Adrienne Barrett Tubridy (CRD #1570968, Registered Supervisor, Marblehead, Massachusetts) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $350,000. In assessing the fine, FINRA took into account financial benefits the firm obtained, and the firm’s discovery, reporting, investigation and corrective measures are reflected in the sanctions. Turbridy was fined $10,000, suspended from association with any FINRA member in any supervisory capacity for 10 days and required to cooperate with FINRA in its prosecution of any other disciplinary action related to these events by, among other things, meeting with and being interviewed by FINRA staff without the need of staff to resort to FINRA Rule 8210, and testifying truthfully at any related hearing. Without admitting or denying the findings, the firm and Tubridy consented to the described sanctions and to the entry of findings that the firm held contractual agreements with third-party investment advisers who provided financial services to firm customers through the firm’s adviser select program for a fee the customers paid, and the firm customers granted discretionary trading authority to the third-party advisers. The findings stated that the agreements contained a confidentiality clause prohibiting firm employees from using the third-party advisers’ portfolio recommendations for other clients. The findings also stated that the firm instituted a written policy and procedure manual distributed to firm employees, including Tubridy, that contained guidelines related to the adviser select account and prohibited shadowing adviser select accounts, but the firm did not implement any specific systems to detect and prevent shadowing; no exception reports were created to identify shadowing, no applicable training was conducted, and no supervisory systems were put in place to monitor accounts for possible shadowing. The findings also included that in one branch office while Tubridy was responsible for performing trade reviews, shadowing was egregious and continued for years.
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