Articles Posted in FINRA Enforcement Actions 2010

Account Executive and Broker/Dealer Fraud and Misrepresentation FINRA Arbitration and Litigation Lawyer, Russell L. Forkey, Esq.

December, 2010:

Tracy Marie Lamoreaux (CRD #4578811, Registered Rep., Phoenix, Arizona) submitted a Letter of Acceptance, Waiver and Consent in which she was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Lamoreaux consented to the described sanction and to the entry of findings that she borrowed money from her member firm’s customer without seeking the firm’s permission to borrow the funds and against the firm’s borrowing procedures, which required its registered representatives to request and obtain the firm’s approval before borrowing money from or lending money to a customer. The findings stated that the firm repaid the customer the loan amount plus interest. The findings also stated that Lamoreaux failed to respond to FINRA requests for documents and information, and to provide testimony. (FINRA Case #2009019285301).

Broker/Dealer and Account Executive Fraud, Misrepresentation and Mismanagement FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.

December, 2010:

Jason Michael Mutascio (CRD #4156832, Registered Rep., Aventura, Florida) 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, Mutascio consented to the described sanction and to the entry of findings that he falsified multiple third-party wire request forms, submitted the falsified forms to his member firm, and obtained and exercised control over at least $52,500 in funds from a customer’s account without the customer’s knowledge or authorization. The findings stated that Mutascio’s submission of the falsified wire requests caused the firm’s books and records to be inaccurate. The findings also stated that Mutascio failed to appear and testify for a FINRA on-the-record interview. (FINRA Case #2009017814901).

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

December, 2010:

David Gustav Much (CRD #4095088, Registered Rep., Los Angeles, California) submitted a Letter of Acceptance, Waiver and Consent in which he was fined $25,000 and suspended from association with any FINRA member in any capacity for five months. The fine must be paid either immediately upon Much’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, Much consented to the described sanctions and to the entry of findings that he recommended that his customers participate in a “Stock to Cash” program under which customers would pledge stock to obtain loans, the proceeds of which were, in many cases, used to purchase non-securities insurance products; and some of Much’s customers participated in that strategy at his recommendation, obtaining loans of more than $4.2 million. The findings stated that Much failed to conduct adequate due diligence concerning the operations or financial stability of the Stock to Cash program lender, and failed to take sufficient action to determine whether his clients’ ownership interest in the pledged securities was adequately protected. The findings also stated that Much did not understand the potential risks inherent in the strategy and therefore did not have a reasonable basis for his recommendations. The findings also included that Much engaged in private securities transactions through his marketing of the program, and he failed to notify or seek his member firm’s approval before engaging in these transactions.  FINRA found that Much’s supervisor directed him to disclose his participation in the program to the firm, and despite this direction, Much failed to provide notification until the day that his supervisor’s annual branch examination began, and Much continued to recommend transactions in the program while the firm was reviewing his participation.  FINRA also found that the firm’s sales practice unit told Much that he was not allowed to recommend Stock to Cash transactions. 

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

December, 2010:

Mark Wayne Mills (CRD #1277647, Registered Principal, Carmel, Indiana) 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, Mills consented to the described sanction and to the entry of findings that he borrowed $317,000 from elderly customers, promised to pay interest and repay the principal in full by certain dates, but failed to repay the loans. The findings stated that Mills’ member firms were unaware of and did not approve the loans. The findings also stated that one firm allowed lending arrangements between registered persons and customers under certain permissible arrangements and with its compliance department’s prior written approval; the other firm prohibited its registered representatives from borrowing money from customers. (FINRA Case #2008015357301).

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

December, 2010:

Bernard Robert Markowitz (CRD #2414854, Registered Principal, Palm Harbor, 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, Markowitz consented to the described sanction and to the entry of findings that he effected transactions in a customer’s account without the customer’s prior knowledge, authorization or consent. The findings stated that the customer verbally complained to Markowitz about the amount of commissions charged in her account, and Markowitz subsequently attempted to settle the verbal complaint by providing the customer with a $1,500 check to compensate her for the commissions that had been charged in her account. The findings also stated that Markowitz did not notify his firm of the customer’s verbal complaint or that he had given her a $1,500 check in an attempt to settle the customer’s verbal complaint. (FINRA Case #2009021131201).

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

December, 2010:

Li Kopp aka Sabrina Kopp, Li Guo, and Sabrina Guo (CRD #5096198, Registered Principal, Beijing, China) submitted a Letter of Acceptance, Waiver and Consent in which she was fined $7,500 and suspended from association with any FINRA member in any capacity for six months. The fine must be paid either immediately upon Kopp’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 findings, Kopp consented to the described sanctions and to the entry of findings that she engaged in an undisclosed outside business activity without providing prompt written notice to her member firm. The findings stated that Kopp, working with others, took steps to establish a business whose apparent purpose was to provide investment banking-related services to Chinese companies seeking access to United States capital markets.

Broker/Dealer and Account Executive Fraud, Misrepresentation and Mismanagement FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.

December, 2010:

Shawn Patrick Koerner (CRD #2183243, Registered Rep., Wautoma, Wisconsin) 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, Koerner consented to the described sanction and to the entry of findings that he borrowed $94,000 from a firm customer when his member firm’s compliance manual generally prohibited representatives from borrowing money from a customer other than a financial institution or a family member; the customer was neither. The findings stated that Koerner failed to respond to FINRA requests for information. (FINRA Case #2009019876801).

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

December, 2010:

Ronald Laverne Kersey (CRD #2392393, Registered Rep., Lawrenceville, Georgia) submitted a Letter of Acceptance, Waiver and Consent in which he was fined $24,500, which includes disgorgement of commissions, and suspended from association with any FINRA member in any capacity for three months. The fine must be paid either immediately upon Kersey’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, Kersey consented to the described sanctions and to the entry of findings that he engaged in private securities transactions when he sold securities in the form of ULPs in various resort properties to investors. The findings stated that Kersey participated in a sale of a total of $194,385.96 worth of ULPs to investors and received approximately $19,438.60 in commissions from the sales. The findings also stated that prior to participating in these sales, Kersey failed to provide his member firm with written notice of the sales of ULP products, and failed to obtain the firm’s written approval.

Investment Advisor and Broker/Dealer Fraud, Misrepresentation and Mismanagement FINRA Arbitration and Litigation Lawyer, Russell L. Forkey, Esq.

December, 2010:

Norman Lee Kearney Jr. (CRD #1665504, Registered Rep., Portland, Oregon) 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, Kearney consented to the described sanction and to the entry of findings that he engaged in an outside business activity and did not provide prompt written notice to his firm regarding his association with a limited liability company. The findings stated that, in regard to FINRA’s request for information, Kearney falsely stated to his supervisor and a firm compliance officer that he was not aware of the limited liability company and had no involvement or relationship with it. The findings also stated that Kearney intentionally provided false information in a response to FINRA when he stated that he was not aware of the company until his supervisor brought it to his attention.  (FINRA Case #2009017287701).

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

December, 2010:

Yisrael Binyamin Goldstein (CRD #2983230, Registered Principal, Spring Valley, New York) 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, Goldstein consented to the described sanction and to the entry of findings that he failed to respond to FINRA requests for information and documents.  (FINRA Case #2007008158202).

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