South Florida Arbitration & Litigation Lawyer Blog
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).