FINRA SEPTEMBER 2015 BROKER DISCIPLINARY REPORT
Each month and again on a quarterly basis, the agency that regulates the financial industry, FINRA (Financial Industry Regulatory Authority), produces a detailed report that runs down all disciplinary actions recently taken against brokerage firms and brokers. This long list of alleged wrongdoing and misconduct reads a lot like a police blotter on money matters. We strongly encourage any investor who suspects their broker and/or broker-dealer of having lost them money on dubious terms to at least skim this report to see if you recognize any names, schemes, products, or securities.
For our part, in addition to circulating the entire FINRA broker-dealer disciplinary report to help get the word out about these alleged misdeeds, we like to pick out some of the highlights from each report. Specifically, we’re looking for schemes or abuses that might be more far-reaching than the individual cases brought through the FINRA arbitration process. In other words, we name names here because we hope to raise awareness out there about certain brokers and products that might otherwise go unnoticed except for the case appearing in the report. In this particular report, we noticed repeated alleged offenses of financial abuse against elderly clients and the misuse and lack of supervision of nontraditional or leveraged ETF investment products.
BestVest Investments, Ltd. of Media, Pennsylvania was censured, fined $15,000 and ordered to pay $2,132.31, plus interest, in restitution to a customer. Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to establish and maintain a supervisory system, including written procedures, reasonably designed to monitor transactions in leveraged, inverse and inverse-leveraged exchange-traded funds (non-traditional ETFs). The findings stated that the firm allowed its representatives to recommend and sell non-traditional ETFs to customers, but its WSPs did not address the sale or supervision of them. Despite the unique features and notable risk factors of nontraditional ETFs, the firm did not provide its representatives or supervisors with any training or other guidance specific to whether and when non-traditional ETFs might be appropriate for their customers. In addition, the firm did not use or make available to its supervisory personnel any reports or other tools to monitor transactions with respect to non-traditional ETFs, including the length of time that customers held open positions in non-traditional ETF.
Jonah Engler of New York, New York was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, Engler consented to the sanction and to the entry of findings that he recklessly misrepresented material facts to his customers regarding senior secured zero-coupon notes issued by a company in a private placement offering, in willful violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Engler, along with other individuals, fraudulently sold a total of nearly $3 million worth of the notes to 59 customers.
Kenneth Hornyak of Traverse City, Michigan was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Hornyak consented to the sanction and to the entry of findings that he refused to appear for an on-the-record interview in connection with FINRA’s investigation into Hornyak’s potential discretionary trading, unauthorized trading and unsuitable short-term trading in UITs.
Raymond James Jackson Jr. of Ohio was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in any capacity for four months. Without admitting or denying the findings, Jackson consented to the sanctions and to the entry of findings that he engaged in business activities for compensation outside the scope of his business relationship with his member firm without providing the firm with written notice of these activities as FINRA rules and his firm’s written procedures required. The findings stated that Jackson sold EIAs valued at more than $2 million to members of the public, some of whom were firm customers, and received compensation for these sales of at least $150,000 in the form of commissions. Jackson inadvertently failed to disclose in writing that he was engaged in selling EIAs on the firm’s annual compliance certifications.
John Pope Jones of Atlanta, Georgia was fined $15,000 and suspended from association with any FINRA member in any capacity for six months. Without admitting or denying the findings, Jones consented to the sanctions and to the entry of findings that he engaged in unsuitable trading in a customer’s account by recommending purchases of speculative private placements of securities, which were not consistent with the customer’s investment objectives, financial situation and needs, resulting in an overconcentration in the customer’s account.
Michael Jeffrey Oppenheim of Livingston, New Jersey was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Oppenheim consented to the sanction and to the entry of findings that he failed to provide documents and information, appear for on-the record testimony, and cooperate with FINRA’s investigation into Oppenheim’s termination from his member firm, as well as allegations that he may have converted approximately $20 million of customer funds, altered customer documents, created false account statements and failed to disclose outside brokerage accounts to the firm.
Hector Perez aka Bruce A. Johnson of Kearny, New Jersey was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, Perez consented to the sanction and to the entry of findings that he recklessly misrepresented material facts to his customers regarding senior secured zero coupon notes issued by a company in a private placement offering, in willful violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Perez, along with other individuals, fraudulently sold a total of nearly $3 million worth of the notes to 59 customers. The findings stated that Perez recklessly misrepresented that the notes were collateralized and that the collateral was of sufficient value to secure an investment in the notes, when in fact, there was not any collateral for them. Perez, having failed to confirm that the collateral existed and that the supposed collateral had any value, recklessly misrepresented to prospective purchasers that their investments would be adequately secured by collateral.
Joseph Charles Schroeder of Dallas, Texas was assessed a deferred fine of $20,000 and suspended from association with any FINRA member in any capacity for 12 months. Without admitting or denying the findings, Schroeder consented to the sanctions and to the entry of findings that he participated in undisclosed private securities transactions without giving prior written notice to, or obtaining prior written approval from, his member firm. The findings stated that Schroeder recommended and sold $300,000 worth of convertible promissory notes in an entity to several investors, including 12 firm customers.
Jonathan Michael Sheklow of Shelton, Connecticut was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, Sheklow consented to the sanction and to the entry of findings that he recklessly misrepresented material facts to his customers regarding senior secured zero coupon notes issued by a company in a private placement offering, in willful violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Sheklow, along with other individuals, fraudulently sold a total of nearly $3 million worth of the notes to 59 customers.
Joshua William Turney of White Plains, New York was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, Turney consented to the sanction and to the entry of findings that he recklessly misrepresented material facts to his customers regarding senior secured zero coupon notes issued by a company in a private placement offering, in willful violation of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Turney, along with other individuals, fraudulently sold a total of nearly $3 million worth of the notes to 59 customers.
John Anthony Waszolek of Scottsdale, Arizona was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, Waszolek consented to the sanction and to the entry of findings that he took unfair advantage of an elderly customer by having the customer give him successor trustee and residual beneficiary roles and responsibilities when he knew of her declining mental condition and lack of testamentary capacity. The findings stated that Waszolek knew that the customer had twice been diagnosed with Alzheimer’s disease and suffered from dementia and memory loss. Despite this knowledge, Waszolek procured the appointment as successor trustee and residual beneficiary of the customer’s trust, and following her death, attempted to inherit more than $1.8 million from her estate.
FINRA Securities Litigation Lawyers
If you or someone you know has been the victim of investment fraud or broker misconduct, please contact our experienced securities attorneys immediately for a free consultation toll-free at 1-855-462-3330 or by using our online contact form.
