FINRA Enforcement Actions 2010

Tyler McKittrick Eddy (CRD #4148945, Registered Representative, New York, New York)

Published on: July 6, 2012 | By Russell L. Forkey, P.A.

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

December, 2010:

Tyler McKittrick Eddy (CRD #4148945, Registered Rep., New York, New York) submitted a Letter of Acceptance, Waiver and Consent in which he was fined $200,000 and suspended from association with any FINRA member in any capacity for one month. Without admitting or denying the findings, Eddy consented to the described sanctions and to the entry of findings that he engaged in improper communications with other inter-dealer brokers about credit default swaps (CDS) dealers’ brokerage fee rate reduction proposals concerning CDS instruments and, therefore, failed to abide by his duty to observe high standards of commercial honor and just and equitable principles of trade. The findings stated that these communications generally arose after individual CDS dealers sought to renegotiate the CDS brokerage fees they paid by transmitting schedules of their proposed brokerage rate reductions to multiple interdealer brokers. The findings also stated that while many of the communications involved one-to-one discussions between Eddy and personnel from other CDS interdealer brokerage firms, some of the communications referred to similar types of interactions about the schedules involving additional inter-dealer brokerage firms.

Dante Thomas Garcia DeMiro (CRD #2674582, Registered Principal, Milford, Michigan)

Published on: July 6, 2012 | By Russell L. Forkey, P.A.

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

December, 2010:

Dante Thomas Garcia DeMiro (CRD #2674582, Registered Principal, Milford, Michigan) 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 nine months. The fine must be paid either immediately upon DeMiro’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, DeMiro consented to the described sanctions and to the entry of findings that he engaged in private securities transactions outside the scope of his employment with his firm when he sold $587,000 of promissory notes in a Regulation D offering of an entity to customers. The findings stated that DeMiro did not provide his firm with prior written notice of the sales and did not receive the firm’s written approval or acknowledgement for these sales. The suspension is in effect from November 1, 2010, through July 31, 2011. (FINRA Case #2008012498701)

Robert Anthony Cataldo (CRD #1056971 Registered Representative, Lexington, Massachusetts)

Published on: July 6, 2012 | By Russell L. Forkey, P.A.

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

December, 2010:

Robert Anthony Cataldo (CRD #1056971, Registered Rep., Lexington, Massachusetts) 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, Cataldo consented to the described sanction and to the entry of findings that he engaged in several outside business activities without providing prompt written notice to his member firm and failed to disclose these outside activities on his firm’s compliance questionnaires. The findings stated that Cataldo failed to completely respond to FINRA requests for information. (FINRA Case #2009017809101).

Global Strategic Investments, LLC (CRD #117028, Miami, Florida) and Cesar Gabriel Hernandez (Registered Principal, Miami, Florida)

Published on: July 6, 2012 | By Russell L. Forkey, P.A.

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

December, 2010:

Global Strategic Investments, LLC (CRD #117028, Miami, Florida) and Cesar Gabriel Hernandez (CRD #3249722, Registered Principal, Miami, Florida) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $150,000. Hernandez was fined $25,000 and suspended from association with any FINRA member in any principal capacity for three months. Without admitting or denying the findings, the firm and Hernandez consented to the described sanctions and to the entry of findings that the firm, acting through Hernandez, failed to adequately implement or enforce its anti-money laundering (AML) compliance program, and to otherwise comply with their AML obligations, by failing to identify and analyze numerous transactions to determine if they were, in fact, suspicious and were required to be reported on a Suspicious Activity Report (Form SAR-SF). The findings stated that the firm and Hernandez permitted foreign customers to deposit funds into their accounts and, within days and/or weeks, disburse funds from their accounts to first and third parties, and in certain instances in amounts slightly below $10,000; although one customer told Hernandez he did this to avoid questions from his bank, the firm and Hernandez permitted the activity to continue and did not file a Form SAR-SF until approximately one year after the activity occurred. The findings also stated that the firm, acting through Hernandez, failed to establish and implement customer identification procedures (CIP) for verifying a customer’s identity.

Fox Financial Management Corporation (CRD® #134277, Carrollton, Texas)

Published on: July 6, 2012 | By Russell L. Forkey, P.A.

Zero Coupon Bond Fraud, Mismanagement and Negligent Supervision FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.

December, 2010:

Fox Financial Management Corporation (CRD® #134277, Carrollton, Texas) and James Edward Rooney Jr. (CRD #1857754, Registered Principal, Carrollton, Texas) submitted an Offer of Settlement in which the firm was censured and fined $40,000, and Rooney was fined $20,000 and suspended from association with any FINRA member in any principal capacity for 15 business days. Without admitting or denying the allegations, the firm and Rooney consented to the described sanctions and to the entry of findings that the firm, acting through Rooney, sold zero-coupon bonds to customers and negligently omitted material facts concerning the fund’s manager, who the State of Texas had charged with forgery of a financial instrument, and was sentenced to five years deferred adjudication and had been the subject of a Temporary Order of Prohibition for selling unregistered securities by the State of Illinois.

FINRA Enforcement Actions – December, 2010

Published on: July 6, 2012 | By Russell L. Forkey, P.A.

FINRA Arbitration and Litigation Fraud, Mismanagement, Unsuitability, Negligent Supervision and Selling Away Attorney Attorney, Russell L. Forkey, Esq.

December, 2010:

Periodically, the Financial Industry Regulatory Authority, Inc. (FINRA) publically announces, on its website, enforcement actions that have either recently been settled by or commenced against broker/dealers and/or associated persons.

Jessie Everett Airington (CRD #2097, Registered Principal, Dallas, Texas)

Published on: July 6, 2012 | By Russell L. Forkey, P.A.

Unauthorized Discretion – Time and Price Discretion FINRA Arbitration and Securities Arbitration Lawyer, Russell L. Forkey, Esq.

January, 2010:

Jessie Everett Airington (CRD #2097, Registered Principal, Dallas, Texas) 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. Without admitting or denying the findings, Airington consented to the described sanctions and to the entry of findings that he executed transactions in a public customer’s account using time and price discretion that the customer had previously verbally granted him, without reconfirming with the customer his desire to execute the transactions. The findings stated that Airington executed the transactions without the customer’s prior written authorization and without his member firm’s acceptance of the account as discretionary. The suspension was in effect from December 7, 2009, through December 18, 2009. (FNRA Case #2008015428301).

TIAA-CREF Individual & Institutional Services, LLC (CRD #20472, NewYork, NewYork)

Published on: July 6, 2012 | By Russell L. Forkey, P.A.

Private Placement and Variable Annuity Misrepresentation Finra Arbitration and Litigation Lawyer, Russell L. Forkey, Esq.

January, 2010

TIAA-CREF Individual & Institutional Services, LLC (CRD #20472, New York, New York) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $100,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to report quarterly statistical and summary information to FINRA regarding a substantial number of customer complaints. The findings stated that the firm failed to establish, maintain and enforce a supervisory system reasonably designed to identify, capture, analyze and report customer complaints that are required to be reported pursuant to NASD Rule 3070(c). The findings also stated that the firm failed to put adequate systems and procedures in place to ensure that all customer complaints were identified and forwarded to the appropriate firm personnel, failed to adequately train all personnel who might potentially receive customer complaints regarding proper handling of complaints, and failed to ensure that sufficient guidance was given to personnel who were responsible for reviewing complaints to determine which complaints were reportable. (FINRA Case #2007011343301).

Newbridge Securities Corporation (CRD #104065, Fort Lauderdale, Florida)

Published on: July 6, 2012 | By Russell L. Forkey, P.A.

Private Placement Fraud, Misrepresentation and Negligent Supervision Lawyer, Russell L. Forkey, Esq.

November, 2011:

Newbridge Securities Corporation (CRD #104065, Fort Lauderdale, Florida) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $20,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to provide material information to customers by negligently permitting its registered representatives to sell securities in private placement offerings to customers using private placement memoranda that omitted material facts. (FINRA Case #2010021106101).

J.J.B. Hilliard,W.L. Lyons, LLC (CRD #453, Louisville, Kentucky)

Published on: July 6, 2012 | By Russell L. Forkey, P.A.

Theft and Negligent Supervision FINRA Arbitration and Litigation Lawyer, Russell L. Forkey, Esq.

January, 2010:

J.J.B. Hilliard,W.L. Lyons, LLC (CRD #453, Louisville, Kentucky) submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured, fined $200,000 and required to place $133,817 into a segregated, interest-bearing account for a period of five years to reimburse customers who can reasonably demonstrate that they made deposits to their firmaccounts at a bank branch and that the firm failed to properly credit the deposits to their accounts. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it failed to have an adequate supervisory system, including written supervisory procedures and a supervisory control system, to properly and timely identify customer checks deposited at affiliated bank branches and ensure that all customer check deposits were duly credited to the appropriate customer accounts. The findings stated that the firm escheated approximately $133,616.65 in funds to the Commonwealth of Kentucky when it was unable to identify the proper customer accounts. The findings also stated that, as a result of the unidentified customer check deposits, the firm failed to make and keep accurate daily records of all receipts and disbursements of cash and other debits and credits in its books and records, including entries to an Escheatment Account. The findings also included that the firmunderstated its net capital charges and incorrectly calculated its Customer Reserve Formula. In addition, the findings included that the firm produced inaccurate month-end customer account statements, incorrectly liquidated certain customer fully paid securities, and failed to segregate some customers’ fully paid securities, resulting in intra-day possession or control deficits.