Articles Posted in FINRA Enforcement Actions 2012

Broker/Dealer and Investment Advisor Fraud and Mirepresentation FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.

March, 2012:

Sergio M. Ripamonti (CRD #2786045, Registered Representative, Sunny Isles Beach, Florida) 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, Ripamonti consented to the described sanction and to the entry of findings that he conducted a securities business with an unregistered person. The findings stated that Ripamonti took instructions from, and acted for the financial benefit of, the unregistered person, who needed access to a broker-dealer to place trades for his customers. Even after Ripamonti learned that FINRA had barred the unregistered person from association with a member firm, he continued to act as a broker-of-record for customer accounts clandestinely controlled by the unregistered person. The findings also stated that Ripamonti accepted and placed dozens of trades for customer accounts at the behest of the unregistered person; and facilitated the unregistered person’s unauthorized access to the customers’ account information stored on the member firm’s trading system, by providing the unregistered person with his password to the firm’s system. The findings also included that Ripamonti was reimbursed for certain expenses using commission monies generated from trades for the customer accounts controlled by the unregistered person. (FINRA Case #2010020869801).

Account Executive and Broker/Dealer Fraud and Misrepresentation Attorney, Russell L. Forkey, Esq.

March, 2012:

Leonel Ramirez (CRD #5599833, Registered Principal, New Britain, Connecticut) was barred from association with any FINRA member in any capacity. The sanction was based on findings that Ramirez failed to respond in a timely manner to FINRA requests for information and documents. The findings stated that Ramirez failed to provide a complete response to subsequent FINRA requests for information and documents. (FINRA Case #2010021899402).

Theft and Conversion of Funds, Fraud and Misrepresentation Attorney, Russell L. Forkey, Esq.

March, 2012:

Vicki Lee Perchinske (CRD #2628617, Registered Representative, Canton, Ohio) was fined $430,420.71, representing the total amount of ill-gotten gain she derived from her conversion of customer funds, and barred from association with any FINRA member in any capacity. The sanctions were based on findings that Perchinske misused and converted $430,420.71 from customers by liquidating their annuities and mutual funds, or withdrawing funds the customers held at a bank affiliated with her member firm, and using the proceeds to purchase cashier’s checks, which were deposited into her personal bank account. The findings stated that Perchinske failed to respond to FINRA requests to appear for on-the-record testimony. (FINRA Case #2010024843701).

Broker/Dealer and Investment Advisor Fraud and Misrepresentation Attorney, Russell L. Forkey, Esq.

March, 2012:

Richard Anthony Neaton (CRD #2585328, Registered Representative, Port Charlotte, Florida) was barred from association with any FINRA member in any capacity.  The SEC imposed the sanction following an order denying Motion for Reconsideration of an SEC opinion issued for an appeal of a NAC decision. The sanction was based on findings that Neaton willfully submitted Forms U4 that did not disclose material information, and willfully failed to update Forms U4 to disclose disciplinary actions and sanctions a state bar disciplinary board imposed on him. (FINRA Case #2007009082902).

Theft, Selling Away and Outside Business Activity FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.

March, 2012:

John R. Montague (CRD #1466653, Registered Representative, Mantua, New Jersey) was barred from association with any FINRA member in any capacity and ordered to pay $163,000, plus interest, in restitution to customers. The sanctions were based on findings that Montague converted $163,000 in customer funds for his personal use. The findings stated that Montague recommended that customers invest in a private investment but did not invest the funds on the customers’ behalf; he instead deposited the funds into his own account for his personal use. The findings stated that Montague made payments to one customer totaling $1,125 from his personal checking account, but did not make any other payments to the customer or any other customer. The findings also stated that Montague failed to appear and testify at a FINRA on-the-record interview to answer questions in connection with its investigation of his misuse of customers’ funds. (FINRA Case #2009018858601)

Broker/Dealer and Investment Advisor Unauthorized Outside Business Activity and Selling Away FINRA Arbitration and Litigation Lawyer, Russell L. Forkey, Esq.

March, 2012:

Scott David Mason (CRD #3270983, Registered Principal, Debary, Florida) submitted an Offer of Settlement in which he was suspended from association with any FINRA member in any capacity for 18 months and required to requalify by examination prior to associating with any member firm in any capacity after the suspension. In light of Mason’s financial status, no monetary sanction was imposed. Without admitting or denying the allegations, Mason consented to the described sanctions and to the entry of findings that he established a hedge fund and participated in the sale of limited partnership units in the hedge fund to investors without his firm’s approval. The findings stated that Mason failed to advise his firm that he had participated in the sale of the limited partnership units and failed to disclose his participation and continuing involvement on firm annual certifications. The findings also stated that Mason raised more than $1million in the sale of the limited partnership units outside the scope of his business with his firm. The findings also included that Mason sold the limited partnership units while not registered with FINRA in a capacity that permitted him to sell the units when he did sell them. FINRA found that Mason opened securities accounts for the hedge fund with other FINRA member firms and did not advise these firms that he was associated with a member firm, and did not advise his firm that he had opened securities accounts with other firms. FINRA also found that Mason did not request that duplicate confirmations and account statements be forwarded to his member firm.

Broker/Dealer and Investment Advisor Unauthorized Outside Business Activity and Selling Away FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.

March, 2012:

Bruce Libman (CRD #1859821, Registered Representative, Melville, New York) submitted

Theft, Fraud and Misrepresentation FINRA Arbitration and Litigation Lawyer, Russell L. Forkey, Esq.

March, 2012:

Vladimir Khosid (CRD #5603183, Registered Representative, San Francisco, California) submitted an Offer of Settlement in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, Khosid consented to the described sanction and to the entry of findings that while an assistant branch manager at a banking affiliate of his member firm, he, without permission or authority, wrongfully processed bank wire transfers where funds totaling $98,847 were transferred from the account of a deceased bank customer to the account of Khosid’s co-conspirator.  The findings stated that Khosid was compensated $25,000 by his co-conspirator for his role in the wrongful conversion of the customer’s funds. The findings also stated that during an interview with the bank’s investigator, Khosid admitted to participating in the wrongful conversion of the customer’s funds. Subsequently, Khosid admitted to FINRA his role in the wrongful conversion and that he accepted a wire transfer submitted to him by the co-conspirator that he knew was fraudulent, the customer was deceased, the proceeds were going into the co-conspirator’s account and that he received $25,000 as a result of his participation in the scheme. (FINRA Case #2010023570001).

Unsuitable Investment FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.

March, 2012:

Erick Enrique Isaac (CRD #5691821, Registered Representative, Aventura, Florida) 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, Isaac consented to the described sanction and to the entry of findings that he became associated with a member firm at the behest of a former registered representative.   The findings stated that the unregistered person, who also is Isaac’s relative, needed access to a broker-dealer to place trades for his customers. While registered with the firm, Isaac relayed trading instructions from his relative to another representative at the firm, who entered the trades. Immediately after he became registered with the firm, Isaac began transferring hundreds of thousands of dollars of commissions on those securities transactions to his relative. The findings also stated that Isaac knew that his relative surreptitiously controlled the trading in at least some of the customer accounts that generated the commission payments. Even after Isaac learned that FINRA had barred his relative from association with a member firm, he continued to transfer commission monies to him. The findings also included that Isaac signed a fabricated consulting agreement with a company purportedly controlled by another relative to facilitate the transfer of $339,000 in commission money to his other relative; sent $155,000 of commission money to another relative, knowing that the former registered representative was the true beneficiary of that money transfer; gave thousands of dollars of commission money in cash to his relative; and acting on his relative’s instructions, completed sets of trade reports-one designed for the firm that included commission markup and markdown information, and a second set for the customers that did not include that information. FINRA found that Isaac received at least $60,000 in compensation from his relative for these acts. (FINRA Case #2010020869802).

Broker/Dealer and Investment Advisor Negligent Supervision, Selling Away and Outside Business Activity FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.

March, 2012:

Marsha Ann Hill (CRD #4197899, Registered Principal, Halstead, Kansas) submitted an Offer of Settlement in which she was fined $20,000 and suspended from association with any FINRA member in any capacity for one year. The fine must be paid either immediately upon Hill’s reassociation with a FINRA member firm following her 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, Hill consented to the described sanctions and to the entry of findings that she made unsuitable recommendations to her customer to purchase a variable annuity in the amount of $110,418.97 and two private placement offerings in the amount of $10,000 each. The findings stated that the transactions were unsuitable because more than 90 percent of the customer’s liquid net worth was placed in the variable annuity, which had a seven-year surrender period and was illiquid; the private placement offerings were highly risky, unsuitable for the customer and did not meet her investment objectives. The findings also stated that after the customer had contacted her to confirm the status of her investments, Hill informed the customer that she had failed to forward the checks and requested that the customer re-date and re-initial the checks that had previously been provided with a different date. The checks received and forwarded blotter Hill completed contained entries for the transactions for which the dates indicated on the blotter were not accurate. The findings also included that by holding the checks, Hill misused the customer’s funds, in that she delayed the intended investments, caused her member firm to be in violation of SEC Rule 15c3-3, and caused the firm’s books and records to be inaccurate.