Regulatory Compliance Blog

USA: Missouri registered representative fined, suspended by FINRA

nileshkokane — Thu, 23 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Charles Michael Dobbins of Columbia, Missouri has 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. The fine must be paid either immediately upon Dobbins’ 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, Dobbins consented to the described sanctions and to the entry of findings that he accepted loans totaling $195,000 from customers made to a company he partially owned and operated.

USA: Ohio individual fined, suspended by FINRA

nileshkokane — Thu, 23 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Timothy Edward Dixon of Hamilton, Ohio has submitted a Letter of Acceptance, Waiver and Consent in which he was fined $15,000 and suspended from association with any FINRA member in any capacity for four months. The fine must be paid either immediately upon Dixon’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, Dixon consented to the described sanctions and to the entry of findings that he failed to report, as required by his member firm’s AML Program, red flags and suspicious activity in the accounts of an individual, who was later determined to have been operating a Ponzi scheme.

USA: Disciplinary action filed against Ohio individual

nileshkokane — Thu, 23 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Harold David Criswell of Cincinnati, Ohio has submitted a Letter of Acceptance, Waiver and Consent in which he was fined $10,000 and suspended from association with any FINRA member in any principal capacity for 30 days. Without admitting or denying the findings, Criswell consented to the described sanctions and to the entry of findings that he failed to report to his member firm’s AML Officer, as its AML program required, red flags and suspicious activity in the accounts of an individual who was later determined to have been operating a Ponzi scheme.

USA: Iowa registered representative fined, suspended by FINRA

nileshkokane — Thu, 23 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Joseph Scott Coy of West Des Moines, Iowa has submitted a Letter of Acceptance, Waiver and Consent in which he was fined $10,000, suspended from association with any FINRA member in any capacity for two years and ordered to pay $20,000, plus interest, in restitution to customers. The fine and restitution must be paid either immediately upon Coy’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.

USA: Disciplinary action filed against Mississippi individual

nileshkokane — Thu, 23 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Kyle Joseph Cooper of Hernando, Mississippi has 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 three months. The fine must be paid either immediately upon Cooper’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.

USA: FINRA fines, suspends California registered representative

nileshkokane — Thu, 23 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Robert John Clark of Vista, California has 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 six months. The fine must be paid either immediately upon Clark’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, Clark consented to the described sanctions and to the entry of findings that he recommended and sold an entity’s private placement offering to some customers for a total of $350,000.

USA: Michigan individual fined and suspended by FINRA

nileshkokane — Thu, 23 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Michael Sungkyu Cho of Grosse Pointe, Michigan has 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 three months. The fine must be paid either immediately upon Cho’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.

USA: Disciplinary action filed against California registered representative

nileshkokane — Thu, 23 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Kristopher William Bush of San Diego, California has submitted an Offer of Settlement in which he was fined $10,000 and suspended from association with any FINRA member in any capacity for 20 business days. Without admitting or denying the allegations, Bush consented to the described sanctions and to the entry of findings that he and his partner created a model fund portfolio that included mutual funds from his member firm-approved funds that illustrated their recommended strategy of a diversified portfolio, and they created a spreadsheet to track the hypothetical portfolio’s performance and included updated S&P 500 performance numbers for comparison purposes.

USA: Iowa resident and his company ordered to pay more than a million by CFTC

nileshkokane — Thu, 23 Feb 2012 16:00:00 +0000

On February 23, 2012 U.S. Commodity Futures Trading Commission (CFTC) announced that commission filed and simultaneously settled charges against Jeffrey J. Kinseth of Cedar Rapids, Iowa, and his Iowa-based company, Virtual Vision Inc., for fraudulently soliciting individuals to participate in a pooled investment vehicle, misappropriation of investor funds, and issuance of false statements to conceal trading losses and fraud. Kinseth is not registered with the CFTC. The CFTC’s order requires Kinseth and Virtual Vision jointly and severally to pay a $575,000 civil monetary penalty and restitution of $574,936. The order also permanently prohibits Kinseth and Virtual Vision from engaging in any commodity-related activity, including trading, and from registering or seeking exemption from registration with the CFTC.

USA: SEC issues order of forthwith suspension against individual

nileshkokane — Thu, 23 Feb 2012 16:00:00 +0000

On February 22, 2012 U.S. Securities and Exchange Commission (SEC) published that the commission deems it appropriate to issue an order of forthwith suspension of Robert S. Brown (“Brown”) pursuant to Rule 102(e)(2) of the Commission’s Rules of Practice [17 C.F.R. 200.102(e)(2)].1 The Commission finds that: Brown was an attorney admitted to practice law in New York. On June 14, 2011, the New York Supreme Court, Appellate Division, First Department entered an order, with Brown’s consent, affirming Brown’s automatic disbarment upon conviction of a felony.

USA: SEC issues order instituting administrative proceedings against Tennessee resident

nileshkokane — Thu, 23 Feb 2012 16:00:00 +0000

On February 23, 2012 U.S. Securities and Exchange Commission (SEC) published that the commission deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 against Jon Edward Hankins (“Hankins” or “Respondent”). In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission’s jurisdiction over him and the subject matter of these proceedings, and the findings contained in Paragraph III.3 below, which are admitted, Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions, as set forth below.

USA: Order imposing $2.5 million lawsuit entered against individual, company

nileshkokane — Thu, 23 Feb 2012 16:00:00 +0000

On February 23, 2012 U.S. Securities and Exchange Commission (SEC) published that the United States District Judge William C. Caldwell of the United States District Court for the Middle District of Pennsylvania, on February 2, 2012, entered an order imposing a $2,500,000 civil penalty jointly and severally against defendants Robert Glenn Bard and Vision Specialist Group, LLC. In an earlier order on November 10, 2011, the Court found that defendants made false statements to thirty-three of their investment advisory clients on 146 separate occasions about what type of securities and holdings they had, where the assets were, and the value of the assets, and that they charged at least one client excessive fees. In assessing the penalty, the Court found that the egregiousness of defendants’ behavior, the recurrent nature of the conduct, the lack of cooperation with authorities, defendants’ degree of scienter, and the risk of loss created by defendants’ actions all weighed in favor of imposing a substantial penalty.

USA: Two former co-founders of financial company sentenced for defrauding investors, clients

nileshkokane — Thu, 23 Feb 2012 16:00:00 +0000

On February 23, 2012 U.S. Securities and Exchange Commission (SEC) published that co-founders of the bankrupt Canopy Financial, Inc., a health care transaction-software company based in Chicago, were sentenced to 15 and 13 years in prison on February 15, 2012, for defrauding investors and clients of more than $93 million. Anthony Banas, Canopy’s chief technology officer, was sentenced to 160 months in prison, while Jeremy Blackburn, Canopy’s former president and chief operating officer, was sentenced to 180 months in prison. Both men pleaded guilty in late 2010 to one count of wire fraud, admitting they engaged in a fraud scheme that cheated investors of approximately $75 million and also misappropriated more than $18 million from customer accounts intended for health care savings and expenses.

USA: FINRA bars Massachusetts registered representative

nileshkokane — Wed, 22 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Maureen Ann Burke of Chelsea, Massachusetts has 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, Burke consented to the described sanction and to the entry of findings that as a senior claims analyst at her member firm’s affiliate, she was responsible for, among other things, processing surrenders, loans, and dividend withdrawals on non-variable life insurance policies.

USA: Disciplinary action filed against Pennsylvania individual

nileshkokane — Wed, 22 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Daniel Bull of Pittsburgh, Pennsylvania has 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, Bull consented to the described sanction and to the entry of findings that he improperly used and converted over $491,000 from member firm customers and additional investors by making fraudulent misrepresentations to induce them to invest funds in a company that he and others established.

USA: Indiana registered representative suspended by FINRA

nileshkokane — Wed, 22 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Dawn Mechael Buchanan of Avon, Indiana has submitted a Letter of Acceptance, Waiver and Consent in which she was suspended from association with any FINRA member in any capacity for five business days. In light of Buchanan’s financial status, no monetary sanction has been imposed. Without admitting or denying the findings, Buchanan consented to the described sanction and to the entry of findings that she opened a new account at her member firm’s affiliate bank for a customer, who at the time was dating Buchanan’s relative, and signed his name on a bank account signature card.

USA: Disciplinary action filed against Maryland individual

nileshkokane — Wed, 22 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Earnest Evan Bridges Sr. of Cheltenham, Maryland has 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, Bridges consented to the described sanction and to the entry of findings that he learned of an investment that would purportedly provide a 100 percent return on a $70,000 investment after a month. To facilitate the investment, the funds were to be wired to an escrow account and a third party would withdraw the funds from the account. Bridges recommended to at least a couple of individuals, including a member firm customer, that they invest through him.

USA: Maryland registered representative barred by FINRA

nileshkokane — Wed, 22 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Alonzo Levi Bethea of Silver Spring, Maryland has 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, Bethea consented to the described sanction and to the entry of findings that he sold securities in the form of limited liability company membership interests totaling $534,644 in a company he formed, and failed to provide written notice to, or obtain approval from, any of his member firms before engaging in the private securities transactions involving his company.

USA: Disciplinary action filed against Texas individual

nileshkokane — Wed, 22 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Bobby Wayne Barnett Jr. of Perryton, Texas has 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, Barnett consented to the described sanctions and to the entry of findings that he recommended that customers liquidate certain of their fixed annuity investments and invest the proceeds in variable annuities.

USA: FINRA bars South Carolina registered principal

nileshkokane — Wed, 22 Feb 2012 16:00:00 +0000

As published in the Financial Industry Regulatory Authority (FINRA) disciplinary actions report for February 2012, Kevin Seth Baltimore of Charleston, South Carolina has 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, Baltimore consented to the described sanction and to the entry of findings that he made fraudulent and unsuitable recommendations to customers, inducing them to invest in a commercial paper note which was a fraudulent private placement purportedly for accredited investors pursuant to Regulation D under the Securities Act of 1933; customers invested a total of $138,000 in the note.