South Florida Arbitration & Litigation Lawyer Blog
Trade Allocation Fraud and Misrepresentation FINRA Arbitration and Litigation Lawyer, Russell L. Forkey, Esq.
January, 2012:
Ronnie Charles Saliba (CRD #2625194, Registered Supervisor, Old Westbury, New York) submitted a Letter of Acceptance, Waiver and Consent in which he was suspended from association with any FINRA member in any capacity for two years. Without admitting or denying the findings, Saliba consented to the described sanction and to the entry of findings that he improperly used his block trading account to allocate favorable trades to two of his customers to the detriment of a discretionary, advisory account managed by the branch manager for the private client group in a branch of his member firm. The findings stated that Saliba engaged in such cherry-picking activity by effecting buy or sell orders through his block trading account without designating the account or accounts for which he was conducting the trade at the time of order execution. Instead, Saliba allocated the trades after the order was filled and the price of the security had been obtained. The findings also stated that his member firm’s policies and procedures required the representative to designate the customer and the quantity to be allocated to the customer when placing an order using the block account. The findings also included that if the price was favorable, Saliba allocated the trade to either one of his customers’ accounts, or both, from which he earned commissions. If the price was not favorable, Saliba allocated the trade to the account the branch manager managed, from which he earned management fees. FINRA found that one of the cherry-picked trades was also an unauthorized trade because the branch manager had not authorized any trade activity for that security. FINRA also found that Saliba’s cherry picking and unauthorized trading cost the discretionary advisory account approximately $60,000. The firm reimbursed that account for its losses, with Saliba contributing to the reimbursement amount.
The suspension is in effect from December 5, 2011, through December 4, 2013. (FINRA Case #2010021176201