Articles Posted in FINRA Enforcement Actions 2011

Boca Raton, Florida Securities Fraud and Mismanagement Attorney, Russell L. Forkey, Esq.

June, 2011:

Jorge Ivan Salgado (CRD #4395823, Registered Representative, Miami, Florida, formerly licensed with Global Strategic Investments, LLC.) submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000 and suspended from association with any FINRA member in any capacity for 10 business days. The fine must be paid either immediately upon Salgado’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, Salgado consented to the described sanctions and to the entry of findings that he exercised discretion on transactions in the account of customers at his member firm, without the customers’ written authorization and without his firm’s acceptance of the account as discretionary.   The suspension was in effect from May 2, 2011, through May 13, 2011. (FINRA Case #2009018425601).

FINRA Securities Mismanagement and Fraud Arbitration Attorney, Russell L. Forkey, Esq.

June, 2011:

Matthew Mark Rairigh (CRD #4364749, Registered Representative, Wintersville, Ohio, formerly licensed with Securities Management & Resources, Inc.) 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, Rairigh consented to the described sanction and to the entry of findings that he submitted false life insurance applications to an insurance carrier in order to generate commissions and to inflate his production numbers. The findings stated that the proposed insureds had never agreed to apply for the policies and the policies were submitted without their knowledge or consent. The findings also stated that Rairigh completed the life insurance applications, falsified the customers’ signatures, listed his business address as the address to send the next quarterly premium notice and paid the initial premium. The findings also included that after the life insurance policy was issued, Rairigh would take the policy to the customer and seek to convince the customer to keep the policy by explaining that the customer merely had to continue to pay the quarterly premiums in order to keep it. (FINRA Case #2009018240001).

FINRA Securities Misconduct and Fraud Arbitration Lawyer, Russell L. Forkey, Esq.

June, 2011:

Thaddeus Newel (CRD #2060528, Registered Representative, Farmington Hills, Michigan, formerly licensed with Equitas America, LLC.) was barred from association with any FINRA member in any capacity. The sanction was based on findings that Newel received checks totaling $135,000 made payable to an entity Newel owned from a customer to be invested on her behalf and instead converted the funds for his personal use. The findings stated that Newel concealed his misconduct from the customer by fabricating and providing her with a Statement of Positions that falsely reflected certain investments he claimed he made in her account, including an annuity valued at $137,714. The findings also stated that Newel failed to respond to FINRA requests for information and documents but sent an email to his firm’s compliance officer asking where he should turn himself in. (FINRA Case #2010021728601).

FINRA Arbitration Mismanagement, Failure to Supervise and Fraud Lawyer, Russell L. Forkey, Esq.

June, 2011:

Robert Joseph Oftring (CRD #1058581, Registered Principal, Worcester, Massachusetts, licensed with Capital Securities Management, Inc.) submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000 and suspended from association with any FINRA member in any principal capacity for six months. Without admitting or denying the findings, Oftring consented to the described sanctions and to the entry of findings that he was responsible for supervising a former registered representative of his member firm and failed to take appropriate action to reasonably supervise her to detect and prevent her violations and achieve compliance with applicable rules in connection with a customer’s account. The findings stated that Oftring, among other things, failed to take reasonable steps to follow up on certain indications of potential misconduct that should have alerted him to the representative’s violations. The findings also stated that the representative engaged in excessive, short-term trading in the customer’s account, which resulted in losses of approximately $60,000; the account was subject to frequent margin calls and transfers from a third-party account to satisfy margin calls in the account, and once, the representative transferred funds back to the third-party account by forging the customer’s signature on an LOA. The findings also included that Oftring was aware of the active trading in the customer’s account and knew that therepresentative was effecting securities transactions in the account while it had a negative balance, but he never stopped the representative from trading and never contacted the customer to discuss the activity. FINRA found that Oftring was aware of and approved the transfer of funds between the customer’s account and the third-party account, and accepted the representative’s explanation for the same without contacting the customers involved in the transfers.  The suspension is in effect from May 2, 2011, through November 1, 2011. (FINRA Case #2009019996501).

FINRA Arbitration Securities Mismanagement and Fraud Attorney, Russell L. Forkey, Esq.

June, 2011:

Kirk Kenneth Kepper (CRD #2980989, Registered Representative, Baton Rouge, Louisiana, formerly licensed with Park Avenue Securities, LLC.) 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, Kepper consented to the described sanction and to the entry of findings that he engaged in outside business activities when he formed limited liability companies and failed to inform his member firm of the companies and of the position he held in the companies. The findings stated that Kepper failed to respond to a FINRA request to appear for an on-the record interview. (FINRA Case #2009020594801). 

FINRA Arbitration, Securities Fraud and Mismanagement Lawyer, Russell L. Forkey, Esq.

June, 2011 FINRA Enforcement Action:

 Jeremy Kenneth Kelter (CRD #843565, Registered Principal, Lake Worth, Florida, formerly licensed with Sagepoint Financial, Inc.) submitted a Letter of Acceptance, Waiver and Consent in which he was fined $5,000 and suspended from association with any FINRA member in any capacity for three months. The fine must be paid pursuant to the installment payment plan as designated on the election of payment form either immediately upon Kelter’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, Kelter consented to the described sanctions and to the entry of findings that he sold fixed annuities to investors outside the scope of his employment with his member firm, for which he received compensation totaling approximately $69,000. The findings stated that Kelter never provided his firm with written notice of these sales.  The suspension is in effect from April 18, 2011, through July 17, 2011. (FINRA Case #2009019380701.

Securities Fraud FINRA Arbitration Lawyer, Russell L. Forkey, Esq.

June, 2011:

Darren Joseph Dietrich (CRD #1814017, Registered Representative, Plant City, Florida, formerly licensed with Brookstone Securities, Inc.) was barred from association with any FINRA member in any capacity. The sanction was based on findings that Dietrich failed to appear and testify at FINRA on-the-record interviews. The findings stated that Dietrich executed unauthorized transactions in the account of his member firm’s customer when he sold and purchased shares without the customer’s prior knowledge, authorization or consent. (FINRA Case #2009016660701).

Securities Fraud FINRA Arbitration Attorney, Russell L. Forkey, Esq.

June, 2011:

Michael Asher Dagnan (CRD #4060750, Registered Representative, Arlington, Texas, formerly licensed with Woodbury Financial Services, Inc.)   was barred from association with any FINRA member in any capacity. The sanction was based on findings that Dagnan failed to respond to FINRA requests for information regarding allegations that he had engaged in a pattern of selling life insurance policies that subsequently lapsed or were cancelled due to non-payment, and Dagnan failed to refund $318,000 in commissions he received. (FINRA Case #2008015585001).

FINRA Securities Fraud Arbitration Lawyer, Russell L. Forkey, Esq.

June, 2011:

Scott William Coy (CRD #2441990, Registered Representative, Irwin, Pennsylvania, formerly licensed with Centaurus Financial, Inc. and Questar Capital Corporation) 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, Coy consented to the described sanction and to the entry of findings that he participated in private securities transactions without prior written notice to, or prior written approval from, his member firms. The findings stated that Coy sold limited liability company interests totaling approximately $5.5 million to investors, many of whom were customers of his firms, in private offerings. The findings stated that proceeds from those securities offerings were used to invest in entities that acquired and operated residential apartment complexes, and Coy received compensation of approximately $327,250 through the offerings. (FINRA Case #2009020923301)

FINRA Securities Arbitration Lawyer, Russell L. Forkey, Esq.

June, 2011:

Uzo Omar Chima (CRD #3067054, Registered Principal, Baltimore, Maryland, formerly licensed with SunTrust Investment Services) submitted an Offer of Settlement in which he was fined $75,000, suspended from association with any FINRA member in any capacity for two years, and ordered to pay $12,443.73, plus interest, in restitution to customers. The fine and restitution must be paid either immediately upon Chima’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 allegations, Chima consented to the described sanctions and to the entry of findings that he engaged in a pattern of unsuitable short-term trading and switching of unit investment trusts (UITs), closed-end funds (CEFs) and mutual funds in retired and/or disabled customer accounts without having reasonable grounds for believing that such transactions were suitable for the customers in view of the nature, frequency and size of the recommended transactions and in light of their financial situations, investment objectives, circumstances and needs. The findings stated that some of the transactions were effected through excessive use of margin and without ensuring that customers received the maximum sales charge discount. The findings also stated that in furtherance of his short-term trading strategy, Chima engaged in discretionary trading without prior written authorization, falsified customer account update documents and mismarked trade tickets for each of the customers’ accounts, stating that the orders were unsolicited when, in fact, they were solicited. The findings also included that the transactions generated approximately $450,000 in commissions for Chima and his firm, and approximately $370,000 in losses to the customers; some customers also paid over $75,000 in margin interest. FINRA found that in numerous UIT purchases, none of which exceeded $250,000, Chima failed to apply the rollover discount to which each customer was entitled. FINRA also found that Chima caused his member firm’s books and records to be false in material respects, in that he provided false information on customer update forms for customers’ accounts, signed the forms certifying that they were accurate and submitted them to his firm.