FINRA Broker Disciplinary Action Report October 2018
Each month, 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. 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, 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.
Brokers & Brokerages Barred, Suspended, or Fined by FINRA
Alex Gerardo Herrera (CRD #3204779, Miami, Florida)
Without admitting or denying the findings, Herrera consented to the sanction and to the entry of findings that he refused to provide information requested by FINRA in connection with its investigation into his possible participation in unreported outside business activities and private securities transactions.
Pamela Shuttleworth (CRD #5222380, Washington, District of Columbia)
Without admitting or denying the findings, Shuttleworth consented to the sanction and to the entry of findings that she refused to provide on-the-record testimony requested by FINRA in connection with its investigation into a former registered representative at Shuttleworth’s member firm. The findings stated that Shuttleworth was one of the persons responsible for reviewing, for supervisory purposes, broker emails for the firm, including those of the former representative at issue in the investigation.
Andrew Jason Mandell (CRD #2194970, Oakland, California)
Without admitting or denying the findings, Mandell consented to the sanction and to the entry of findings that he refused to appear for FINRA on-the-record testimony in connection with potential violations of Section 5 of the Securities Act of 1933.
Daniel Noah Winger (CRD #1542674, Bonney Lake, Washington)
Without admitting or denying the findings, Winger consented to the sanction and to the entry of findings that he converted the funds of an elderly customer of his member firm for his own personal use. The findings stated that the elderly customer gave checks to Winger totaling approximately $100,000. The customer understood that the checks were to be used for her benefit, including paying commissions associated with her brokerage account and for taxes. Winger, however, endorsed the checks, deposited them into a separate bank account and used the funds for his own personal use.
Patrick Jermaine Phillips (CRD #4315963, Blue Island, Illinois)
Without admitting or denying the findings, Phillips consented to the sanctions and to the entry of findings that contrary to his member firm’s WSPs, he accepted two loans totaling $70,000 from a customer and has not repaid them.
Lloyd Thomas Layton (CRD #1618414, Dumfries, Virginia)
Without admitting or denying the findings, Layton consented to the sanctions and to the entry of findings that he was engaged in an unsuitable pattern of short-term trading of unit investment trusts (UITs) in customer accounts. The findings stated that Layton repeatedly recommended that the customers purchase UITs and then sell these products well before their maturity dates. The majority of the UITs that Layton recommended had maturity dates of at least 24 months and carried sales charges ranging from 1.95 percent to 3.95 percent. Layton repeatedly recommended that his customers sell their UIT positions less than a year after purchase and the average holding period was approximately 265 days. The findings also stated that Layton recommended that his customers use the proceeds from the short-term sale of a UIT to purchase another UIT with similar or identical investment objectives. Layton’s recommendations caused his customers to incur unnecessary sales charges, and were unsuitable in view of the frequency and cost of the transactions.
Jonathan William Iraggi (CRD #5857254, Ocean, New Jersey)
Without admitting or denying the findings, Iraggi consented to the sanctions and to the entry of findings that he exercised discretion in customer accounts without obtaining written authorization from the customers or acceptance by his member firm. The findings stated that while the customers had given Iraggi express or implied authority to exercise discretion in their accounts, none of the customers had provided written authorization for Iraggi to utilize discretion. The findings also stated that Iraggi provided a false response on an annual compliance questionnaire submitted to his firm that indicated that he had not exercised discretion in any customer account. The suspension was in effect from September.
For the full Disciplinary Action Report from FINRA, visit their website by clicking here.