NASD Regulation, Inc. (NASD According to the findings, the firm Disciplinary RegulationSM) has taken disci- employed a three-step process for Actions plinary actions against the soliciting customers, first using following firms and individuals for unregistered cold callers to Disciplinary Actions violations of National Association prospect for potential customers. of Securities Dealers, Inc. (NASD¨) Then the firm’s representatives Reported For May rules; federal securities laws, would cold call the prospects and rules, and regulations; and the attempt to solicit their purchase of rules of the Municipal Securities a known Nasdaq or New York Rulemaking Board (MSRB). The Stock Exchange (NYSE) listed information relating to matters stock, and subsequently employ a contained in this Notice is current “bait and switch” tactic by calling as of the end of April 2001. back the customers and soliciting their purchase of one of the deal Firm Expelled, Individual stocks. The NASD found that Sanctioned the misrepresentations, price Baxter, Banks & Smith, Ltd. predictions, and omissions by (CRD #40771, St. Petersburg, the representatives involved Florida) and Francis Martin information that was material to McDermott (CRD #1013320, the investors’ investment decision, Registered Principal, St. and that certain representatives Petersburg, Florida) submitted a engaged in unauthorized trades Letter of Acceptance, Waiver, and when customers did not agree to Consent in which the firm was purchase a deal stock and refused expelled from NASD membership. to execute customer orders to sell McDermott was barred from the stock. The NASD also found association with any NASD that the firm, acting through member in any supervisory, McDermott, failed to comply with principal, or proprietary capacity, Securities Exchange Act Rule 15g- and barred from association with 9 concerning approval of accounts any NASD member in any to trade in penny stocks and capacity with the right to reapply receipt of customer agreements to for association with any NASD specific transactions, and the member firm after three years in a requirement to obtain suitability non-supervisory, principal, or statements signed by the proprietary capacity. In light of the customers and approved by the financial status of McDermott, no firm. In addition, the NASD monetary sanction has been determined that the firm, acting imposed. Without admitting or through McDermott, failed to denying the allegations, the establish, maintain, and enforce a respondents consented to the system to supervise the activities described sanctions and to the of its registered representatives entry of findings that the firm, that was reasonably designed to acting through its representatives, achieve compliance with engaged in a scheme involving applicable securities laws, rules, the use of high pressure, and regulations. (NASD Case manipulative, and deceptive sales #C07010014) practices and misrepresentations and omissions of material facts in connection with the sale of common stock referred to as “deal stocks.”
NASD Notice to Members—Disciplinary Actions May 2001
299 Firms Fined, Individuals $100,000, suspended from April 12, 2001, and will conclude Sanctioned association with any NASD at the close of business October Commerzbank Capital Markets member in any capacity for six 11, 2001. Sitomer’s and Rome’s Corporation (CRD #21787, New months, and suspended from suspensions in any principal York, New York) and Udo Braun association with any NASD capacity began April 12, 2001, (CRD #2897104, Registered member in any principal capacity and will conclude at the close of Principal, Rye, New York) for two years. Sitomer was also business April 11, 2003. (NASD submitted a Letter of Acceptance, ordered to guarantee $225,000 of Case #CAF000005) Waiver, and Consent in which they the firm’s $1.1 million disgorgement. were censured and fined $15,000, Firms And Individuals Fined jointly and severally. Braun was Without admitting or denying the also suspended from association BCR Capital Corporation (CRD allegations, the respondents #25330, Indianapolis, Indiana) with any NASD member in any consented to the described principal capacity for five business and Rex M. Craig (CRD sanctions and to the entry of #1988160, Registered Principal, days. Without admitting or denying findings that the firm participated the allegations, the respondents Tipton, Indiana) submitted a as co-underwriter in an IPO of Letter of Acceptance, Waiver, consented to the described common stock and warrants. sanctions and to the entry of and Consent in which they were Sitomer and Rome sold a majority censured and fined $10,000, jointly findings that Braun became of the firm’s allocation to public actively engaged in the and severally. Without admitting customers whose accounts they or denying the allegations, the management of the firm’s controlled, and repurchased all securities business prior to respondents consented to the of the securities bought by the described sanctions and to the becoming registered with the customers at the same prices after NASD in any capacity. entry of findings that the firm, the opening of aftermarket trading acting through Craig, participated Braun’s suspension began April and before becoming available to in an all-or-none offering of 16, 2001, and concluded at the the investing public, thereby limited partnership interests and close of business April 20, 2001. continuing the distribution. rendered false and misleading (NASD Case #C05990038) Following the repurchases, the representations in the offering firm upticked its quotations and memorandum that investors would Millennium Securities Corp. significantly increased the prices receive a refund of their (CRD #31695, New York, New of the securities despite relatively subscription price together with York), Richard Allen Sitomer little trading activity, and used interest earned therein if the terms (CRD #1995999, Registered special selling methods to resell of the contingency were not met. Principal, New York, New York) the securities to retail customers at The findings also stated that the and Todd Michael Rome (CRD prices substantially above those firm, acting through Craig, failed to #2082803, Registered Principal, paid by the firm to reacquire them. properly escrow funds for sales New York, New York) submitted The NASD also found that the firm, from investors’ funds. (NASD an Offer of Settlement in which the Sitomer, and Rome made markets Case #C8A010009) firm was ordered to file a in common stock and warrants, Broker/Dealer Withdrawal Form to and bid for, purchased, or induced NevWest Securities Corporation withdraw its membership from others to purchase those (CRD #46464, Henderson, NASD no later than December 31, securities. The findings also stated Nevada) and Anthony Marks 2001, and that, if it fails to do so, that the respondents failed to Mello, III (CRD #2781726, not to oppose any action brought disclose that they were conducting Registered Principal, Las Vegas, by the NASD Department of a distribution, the amount of Nevada) submitted a Letter of Enforcement seeking its expulsion. securities distributed, the source Acceptance, Waiver, and Consent The firm was also required to of the securities, and that the firm’s in which they were censured and disgorge $1.1 million and ordered customers would be paying fined $15,000, jointly and not to act as a participant in any significantly more than what the severally. Without admitting or underwriting or initial public firm had just paid for the same denying the allegations, the offering (IPO) in any capacity until securities. respondents consented to the such time as it has withdrawn from described sanctions and to the membership in the NASD. Sitomer Sitomer’s and Rome’s entry of findings that the firm, and Rome were each fined suspensions in any capacity began acting through Mello, offered and
NASD Notice to Members—Disciplinary Actions May 2001
300 sold shares of common stock customer. Failure to pay the of equity traders and supervisors. through a private “minimum- fine within 60 days from the (NASD Case #C8A000050) maximum” offering to public date the AWC is issued will customers and presented to the result in the suspension of Schaen Broadmark Capital Corporation customers a private placement from association with any NASD (CRD #39056, Seattle, memorandum that contained false member in any capacity and Washington) submitted a Letter of and misleading statements. The the suspension of the firm’s Acceptance, Waiver, and Consent findings also stated that the firm, membership until payment is in which the firm was censured acting through Mello, failed to complete. Without admitting or and fined $10,500. Without deposit and retain customer funds denying the allegations, the admitting or denying the in a properly established bank respondents consented to the allegations, the firm consented to escrow account pending the described sanctions and to the the described sanctions and to the occurrence of the contingency, entry of findings that the firm, entry of findings that it failed to failed to compute the amounts acting through Schaen, failed to report to the ACT the correct required to be deposited into establish procedures for the review symbol indicating whether the firm the Special Reserve Bank Account and endorsement by a principal of executed transactions in eligible for the Exclusive Benefit of all transactions that would prevent securities in a principal or agency Customers, and failed to timely unauthorized trading. (NASD Case capacity; incorrectly reported to deposit the amounts required to #C10010041) ACT transactions as agency be deposited into the account. crosses when corresponding order (NASD Case #C02010005) tickets reflected the firm acting as Firms Fined principal; failed to report to ACT Tower Equities, Inc. (CRD Baird, Patrick & Co., Inc. (CRD the correct symbol indicating #16195, Dayton, Ohio) and #1149, New York, New York) whether the firm executed Kenneth Robert Wiseman (CRD submitted an Offer of Settlement in transactions in eligible securities in #1345001, Registered Principal, which the firm was censured and a principal or agency capacity; and Vandalia, Ohio) submitted a fined $12,500. Without admitting failed to accept in ACT Letter of Acceptance, Waiver, or denying the allegations, the firm transactions in eligible securities and Consent in which they were consented to the described within 20 minutes of the execution censured and fined $10,000, jointly sanctions and to the entry of time. The findings also stated that and severally. Without admitting findings that it failed to accept the firm failed to consistently or denying the allegations, the Automated Confirmation record or maintain all relevant respondents consented to the Transaction ServiceSM (ACTSM) terms and conditions on the described sanctions and to the eligible transactions within 20 memoranda for orders in that there entry of findings that the firm, minutes after execution and was no indication of “not held” to acting through Wiseman, effected reported Consolidated Quotation denote working order status. The transactions in securities when it Service transactions without the NASD also found that the firm failed to maintain the minimum “.T” modifier. The findings also incorrectly disclosed agency required net capital. The findings stated that the firm reported the capacity on its customer also stated that the firm, acting incorrect volume for a Nasdaq confirmations for transactions through Wiseman, failed to National Market (NNM) transaction when corresponding order tickets maintain an accurate general and failed to establish, maintain, reflected the firm acting as ledger. (NASD Case and enforce adequate written principal. Furthermore, the NASD #C8B010008) supervisory procedures to address found that the firm used a non- compliant, non-synchronized, Wolff Investment Group, all areas of the firm’s trading and market making business in that the mechanical time stamp machine Incorporated (CRD #21930, New that failed to provide the “seconds” York, New York) and Patricia firm’s procedures failed to address ACT rule compliance, limit order field to document times of receipt Ann Schaen (CRD #412379, and execution. Moreover, the Registered Principal, New York, protection, Small Order Execution SM SM firm’s supervisory system failed to New York) submitted a Letter of System (SOES ) activity, locked and crossed markets, short sale provide for supervision reasonably Acceptance, Waiver, and Consent designed to achieve compliance in which they were censured and rule compliance, the Order Audit SM with respect to applicable fined $15,000, payable to a public Trail System (OATS ) clock synchronization, and registration securities laws and regulations
NASD Notice to Members—Disciplinary Actions May 2001
301 concerning trading and market consented to the described reporting, registration, locked and place rules. (NASD Case sanctions and to the entry of crossed markets, anti-competitive #C3B010004) findings that an order was practices, SEC and NASD firm presented to the firm at the firm’s quote rules, short sale affirmative Dean Witter Reynolds, Inc. (CRD published bid or published offer in determination, and OATS. (NASD #7556, New York, New York) an amount up to its published Case #CMS010038) submitted a Letter of Acceptance, quotation size. The firm failed to Waiver, and Consent in which the execute the orders upon Jefferson Pilot Securities Corp. firm was censured, fined $15,000, presentment and thereby failed to f.k.a. Chubb Securities (CRD and required to revise its written honor its published quotation. The #3870, Atlanta, Georgia) supervisory procedures relating to findings also stated that the firm, a submitted a Letter of Acceptance, the U.S. Securities and Exchange market maker in securities, without Waiver, and Consent in which the Commission (SEC) and NASD firm making reasonable efforts to avoid firm was censured and fined quote rules. Without admitting or a locked or crossed market by $15,000. Without admitting or denying the allegations, the firm executing transactions with all denying the allegations, the firm consented to the described market makers whose quotations consented to the described sanctions and to the entry of would be locked or crossed, sanctions and to the entry of findings that an order was entered bid or ask quotations in findings that during the course of presented to the firm at the firm’s the Nasdaq stock market that its branch office audits and published bid or published offer in caused a locked or crossed market subsequent reviews of a registered an amount up to its published condition to occur in each representative’s activities, the firm quotation size. The NASD found instance, and failed to use discovered a mutual fund that the firm failed to execute the reasonable diligence to ascertain switching by the representative. orders upon presentment and the best inter-dealer market and The NASD determined that, thereby failed to honor its failed to buy or sell in such market although the firm addressed the published quotation. Furthermore, so that the resultant price to its mutual fund switching with the the NASD determined that the customers was as favorable as representative, it failed to firm’s supervisory system did not possible under prevailing market adequately address this issue in a provide for supervision reasonably conditions. Furthermore, the timely manner and, therefore, designed to achieve compliance NASD found that the firm failed to failed to supervise, establish, and with respect to the applicable execute an order fully and maintain a supervisory system that securities laws and regulations promptly, and failed to display would ensure compliance with its concerning the SEC and NASD immediately customer limit orders suitability obligations. (NASD firm quote rules. (NASD Case in Nasdaq securities in its public Case #C07010011) #CMS010034) quotation, when each such order Jesup & Lamont Securities J.B. Oxford & Company (CRD was at a price that would have Corp. (CRD #17833, New York, #14343, Beverly Hills, California) improved the firm’s bid or offer for New York) submitted a Letter of submitted a Letter of Acceptance, each such security, or when the Acceptance, Waiver, and Consent Waiver, and Consent in which it order was priced equal to the in which the firm was censured was censured, fined $76,500, firm’s bid or offer and the national and fined $13,500. Without required to pay $12,002.96, plus best bid or offer for each such admitting or denying the interest, in restitution to customers, security, and the size of the order allegations, the firm consented to and required to revise its written represented more than a de the described sanctions and to the supervisory procedures relating to minimis change in relation to the entry of findings that it failed to the SEC and NASD firm quote size associated with the firm’s bid report short sale transactions to rules, the Order Handling Rules, or offer in each such security. The the ACT with a short sale modifier trade reporting, ACT reporting, NASD also determined that the and failed to record or maintain all registration, locked and crossed firm’s supervisory system did not relevant terms and conditions on markets, anti-competitive provide for supervision reasonably the memoranda for block order practices, books and records, designed to achieve compliance transactions in that there were no short sale affirmative with respect to the applicable indications of “not held” to denote determination requirements and securities laws and regulations working order status. The findings OATS. Without admitting or concerning the Order Handling also stated that the firm failed to denying the allegations, the firm Rules, trade reporting, ACT show the correct time of execution
NASD Notice to Members—Disciplinary Actions May 2001
302 on the memoranda of transactions published quotation, when each immediately display customer limit reported to ACT. The NASD such order was at a price that orders in Nasdaq securities in its also found that customer would have improved the firm’s bid published quotation, when each confirmations failed to properly or offer for each such security, or such order was at a price that disclose the reported price to ACT when the order was priced equal would improve the firm’s bid or and the difference between the to the firm’s bid or offer and the offer in each security, or at a price reported price and the price to national best bid or offer for each equal to its public quote when the customer, and incorrectly such security, and the size of the such quote was priced equal to the disclosed agency capacity on order represented more than a de firm’s bid or offer and the national its customer confirmations for minimis change in relation to the best bid or offer for each such transactions when corresponding size associated with the firm’s bid security and the size of the order order tickets and account or offer in each such security. represented more than a de statements reflected the firm (NASD Case #CMS010035) minimis change in relation to the acting as principal. Furthermore, size associated with its bid or offer the NASD found that the firm Pennsylvania Merchant Group, in each such security. (NASD failed to maintain a written record Ltd. (CRD #18533, West Case #CMS010028) of its compliance with affirmative Conshohocken, Pennsylvania) determination requirements in submitted an Offer of Settlement in Robb Peck McCooey Clearing connection with customer-related which the firm was censured and Corporation (CRD #7432, New short sales. Moreover, the NASD fined $20,000. Without admitting or York, New York) submitted a found that the firm’s supervisory denying the allegations, the firm Letter of Acceptance, Waiver, and system failed to provide for consented to the described Consent in which the firm was supervision reasonably designed sanctions and to the entry of censured and fined $20,000. to achieve compliance with respect findings that it failed to establish, Without admitting or denying the to applicable securities laws and maintain, and enforce supervisory allegations, the firm consented to regulations concerning trading and procedures for its retail sales the described sanctions and to the marketplace rules. (NASD Case activity reasonably designed to entry of findings that it failed, #C3B010005) achieve compliance with within 90 seconds after execution, applicable securities laws and to transmit through ACT, last sale Merrion Group, LLC (CRD regulations. (NASD Case reports of transactions in an NNM #30145, Westfield, New Jersey) #C9A000007) security. (NASD Case submitted an Offer of Settlement #CMS010037) in which the firm was censured Raymond James & Associates, and fined $15,000. Without Inc. (CRD #705, St. Petersburg, Seaboard Securities, Inc. (CRD admitting or denying the Florida) submitted a Letter of #755, Florham Park, New allegations, the firm consented to Acceptance, Waiver, and Consent Jersey) submitted a Letter of the described sanctions and to the in which the firm was censured, Acceptance, Waiver, and Consent entry of findings that it conducted a fined $25,000, and required to pay in which the firm was censured securities business while failing to $1,137.50, plus interest, in and fined $27,500. Without maintain its minimum required net restitution to public customers. admitting or denying the capital. (NASD Case Without admitting or denying the allegations, the firm consented to #C9B000013) allegations, the firm consented to the described sanctions and to the the described sanctions and to the entry of findings that it failed to Morgan Stanley & Co., entry of findings that it failed to use establish, maintain, and enforce Incorporated (CRD #8209, New reasonable diligence to ascertain adequate written supervisory York, New York) submitted a the best inter-dealer market; failed procedures regarding options Letter of Acceptance, Waiver, and to buy or sell in such market so transactions and the review of Consent in which the firm was that the resultant price to its branch office activities. The censured and fined $20,000. customers was as favorable as findings also stated that the firm Without admitting or denying the possible under prevailing market failed to designate a supervisory allegations, the firm consented to conditions; and to ascertain the principal for trading/market the described sanctions and to the best inter-dealer market by failing making, options, continuing entry of findings that it failed to to execute customer market orders education, and government display immediately customer limit fully and promptly. The findings securities. In addition, the NASD orders in Nasdaq securities in its also stated that the firm failed to determined that, in connection
NASD Notice to Members—Disciplinary Actions May 2001
303 with an IPO underwriting, the firm $10,000, suspended from Virginia) was barred from accepted customer checks dated association with any NASD association with any NASD prior to the effective date of the member in any capacity for 60 member in any capacity. The offering, and failed to update its business days, and ordered to sanction was based on findings quote within 30 seconds in requalify by exam as a general that Brown received insurance instances when the customer’s securities principal within 60 days disbursement checks totaling limit order was priced better than from the day the order accepting $8,510.82 sent by his member the firm’s prevailing quotation. the Offer was issued by the NASD. firm for delivery to insurance Furthermore, the NASD found that If Bekhor fails to requalify, he will customers, forged the the firm reported short sale be suspended from acting in such endorsements on the checks, and transactions to ACT without using capacity until the exam is deposited them into his personal the short sale modifier; failed to successfully completed. The fine bank account. In addition, Brown execute short sale transactions on must be paid before reassociating completed and submitted to his a down bid at a price that was not with any NASD member or before member firm an unauthorized 1/16 above the current inside bid; requesting relief from any statutory application for a $12,000 and failed to maintain evidence of disqualification. Without admitting withdrawal on behalf of a public having made an affirmative or denying the allegations, Bekhor customer, received a $12,000 determination ensuring that the consented to the described disbursement check from his shares could be obtained for a sanctions and to the entry of member firm, forged the short sale. Moreover, the NASD findings that a member firm, acting customer’s endorsement on the found that the firm failed to identify through Bekhor, failed to have a check, and deposited it into his on order tickets whether the qualified municipal securities personal bank account. Brown transactions were long or short, principal engaged in the also submitted loan applications and failed to file, or to file in a management, direction, or on behalf of public customers timely manner, customer supervision of an underwriting, and without their authorization, complaints it received. (NASD allowed an unregistered person received checks totaling $10,500, Case #C9B010026) to act in that capacity; failed to forged the endorsements of the designate a municipal securities customers on the disbursement principal responsible for its checks, and deposited them into Individuals Barred Or supervision; and failed to have the his personal bank account. Suspended trade tickets for the underwriting Furthermore, Brown failed to David Stephen Adams (CRD approved by a municipal securities respond to NASD requests for #1450961, Registered principal. The findings also stated information. (NASD Case Representative, Bloomington, that a member firm, acting through #C07000064) Illinois) was barred from Bekhor, violated the terms of an association with any NASD NASD Restriction Agreement and David Wainwright Buys, Sr. member in any capacity. The acted as sole underwriter in a (CRD #1965954, Registered sanction was based on findings municipal securities offering. The Representative, Montville, New that Adams endorsed a public NASD also found that Bekhor Jersey) submitted a Letter of customer’s check for $7,318.06, failed to send to the Municipal Acceptance, Waiver, and Consent and used the funds either for Securities Rulemaking Board in which he was barred from his own use and benefit or for (MSRB) copies of a completed association with any NASD some purpose other than the MSRB Form G-36, failed to pay member in any capacity and benefit of the customer, without an underwriting fee to the MSRB, ordered to pay $66,993.23 in the knowledge or consent of the and failed to comply with MSRB restitution to a trust account customer. Adams also failed to bookkeeping requirements. and/or its beneficiaries. Proof of respond to NASD requests for restitution, with interest, shall be a information. (NASD Case Bekhor’s suspension began April prerequisite before reassociating #C8A000057) 16, 2001, and will conclude at the with a member firm or before close of business July 10, 2001. requesting relief from any statutory Jonathan Elia Sasoon Bekhor (NASD Case #C10990037) disqualification. Without admitting (CRD #1910534, Registered or denying the allegations, Buys Principal, Beverly Hills, Ricardo Fallesgon Brown (CRD consented to the described California) submitted an Offer of #845315, Registered sanctions and to the entry of Settlement in which he was fined Representative, Newport News, findings that he converted
NASD Notice to Members—Disciplinary Actions May 2001
304 $66,993.32 from a trust account in any NASD member in any capacity suspended from association with which he served as a trustee and for six months. The fine must be any NASD member in any capacity used the funds for his own use and paid before reassociating with any for 60 days for making unsuitable benefit, without the beneficiaries’ NASD member following the recommendations. The sanctions knowledge or consent. (NASD suspension or before requesting were based on findings that Cash Case #C9B010023) relief from any statutory recommended that a public disqualification. Without admitting customer purchase a single Nicholas Michael Calapa (CRD or denying the allegations, Carlson premium deferred annuity outside #1245429, Registered consented to the described of the scope of his employment Representative, Stamford, sanctions and to the entry of with his member firm and failed to Connecticut) submitted a Letter of findings that he failed to give prior provide prior written notice to, or Acceptance, Waiver, and Consent written notice to his member firm receive written approval from, his in which he was suspended from and receive written approval from member firm before such association with any NASD the firm prior to participating in recommendation. Cash also member in any capacity for six private securities transactions. recommended to a public months. In light of the financial customer the purchase of mutual status of Calapa, no monetary Carlson’s suspension began May funds and then changed the sanctions were imposed. Without 7, 2001, and will conclude at the customer’s account from a cash admitting or denying the close of business November 6, account to a margin account, allegations, Calapa consented 2001. (NASD Case #C04010014) without the customer’s knowledge to the described sanction and or consent, and without ever to the entry of findings that he Paul Edward Carney (CRD #1943974, Registered having discussed the use of recommended unsuitable trading margin with the customer, and in the account of a public Representative, Vernon Hills, Illinois) was barred from engaged in a series of transactions customer. Calapa inappropriately in the customer’s account that recommended that the customer association with any NASD member in any capacity and were unsuitable for the customer continue use margin loans in based upon the customer’s order to engage in a short-term ordered to pay $1,700,000, plus interest, in restitution to a public investment objective, financial trading strategy involving highly situation, and needs. concentrated positions in particular customer. The sanctions were securities, causing the account to based on findings that Carney Cash’s suspension began April 16, suffer losses in excess of $88,000. effected unprofitable trades in the 2001, and will conclude at the The findings also stated that accounts of a public customer and close of business July 24, 2001. Calapa acted in reckless prepared and delivered false profit (NASD Case #C07000075) disregard of his client’s interest and loss statements to the when he disregarded the impact customer in an attempt to conceal William E. Cherry, Jr. (CRD of the short-term trading, the losses incurred in the accounts. #3237150, Associated Person, inappropriate use of margin in the Moreover, Carney continued to West Hempstead, New York) account, the risks that the account effect trades in the customer’s submitted a Letter of Acceptance, incurred from this activity, and the accounts after being instructed by Waiver, and Consent in which he high concentration levels of certain the customer to stop. Carney also was barred from association with securities in the account. failed to answer all questions any NASD member in any asked of him during an NASD on- capacity. Without admitting or Calapa’s suspension began April the-record interview. (NASD Case denying the allegations, Cherry 16, 2001, and will conclude at the #C8A000024) consented to the described close of business October 15, sanction and to the entry of 2001. (NASD Case #C11010010) Robert Scott Cash (CRD findings that he received the #2063885, Registered proctor’s report from the NASD’s Daniel Clinton Carlson (CRD Representative, St. Petersburg Certification Testing Center that #1497477, Registered Beach, Florida) was fined stated that Cherry had failed the Representative, Dassel, $20,000 and suspended from NASD Series 63, Uniform Minnesota) submitted a Letter of association with any NASD Securities Agent State Law exam, Acceptance, Waiver, and Consent member in any capacity for 30 and altered the proctor’s report to in which he was fined $5,000 and business days for engaging in reflect that he had passed the suspended from association with outside business activities, and
NASD Notice to Members—Disciplinary Actions May 2001
305 exam. Cherry presented the Richard D’Ambola (CRD suspended from association with altered report to his member firm, #2816480, Registered any NASD member in any capacity misrepresenting that he had Representative, Landing, New for 30 days, ordered to pay $5,000 passed the exam. (NASD Case Jersey) submitted a Letter of in restitution to a public customer, #C10010047) Acceptance, Waiver, and Consent and ordered to attend a continuing in which he was fined $7,500, education course with respect to James Joseph Corcoran (CRD suspended from association with the duties of a general securities #2328082, Registered Principal, any NASD member in any capacity representative. The fine payment Patchogue, New York) submitted for six months, and required to and satisfactory proof of payment an Offer of Settlement in which he disgorge $13,460, plus interest, to of restitution, with interest, must be was fined $10,000 and suspended customers. The fine must be paid provided before reassociating with from association with any NASD before reassociating with any any NASD member following the member in any capacity for one NASD member following the suspension or before requesting month. The fine must be paid suspension or before requesting relief from any statutory before reassociating with any relief from any statutory disqualification. Without admitting NASD member following the disqualification. Proof of payment or denying the allegations, Forti suspension or before requesting of disgorgement, with interest, consented to the described relief from any statutory shall be a prerequisite before sanctions and to the entry of disqualification. Without admitting reassociating with a member firm findings that he failed to execute a or denying the allegations, or before requesting relief from public customer’s request to sell Corcoran consented to the any statutory disqualification. shares of stock and warrants. The described sanctions and to the Without admitting or denying the findings also stated that Forti entry of findings that he offered allegations, D’Ambola consented made material misrepresentations and sold securities to public to the described sanctions and to to another public customer that customers by means of the entry of findings that he resulted in the customer misrepresentations of material effected offers and sales of purchasing shares of stock and information and omissions to securities to public customers then delayed his request to sell the disclose material information. The outside of the normal course or stock. findings also stated that Corcoran scope of his association with his made predictions of the future member firm and failed to provide Forti’s suspension began April 16, price of a speculative security in his member firm prior written 2001, and will conclude at the connection with the offer and sale notification of such offers and close of business May 15, 2001. of that security to a public sales of securities. (NASD Case #C10010039) customer. D’Ambola’s suspension began Dennis Lester Freeman (CRD Corcoran’s suspension will begin May 7, 2001, and will conclude at #213683, Registered the earlier of 30 days after he the close of business November 6, Representative, Storm Lake, enters a plea of guilty or nolo 2001. (NASD Case #C9B010020) Iowa) submitted a Letter of contendre or is convicted in a Acceptance, Waiver, and Consent criminal case or December 31, Leigh Farrington Fiske (CRD in which he was fined $2,500 and 2001. (NASD Case #C3A000028) #2330320, Registered suspended from association with Representative, Monterey, any NASD member in any capacity Shawn Cunningham (CRD California) was barred from for 10 business days. Without #4031341, Registered association with any NASD admitting or denying the Representative, Raleigh, North member in any capacity. The allegations, Freeman consented to Carolina) was barred from sanction was based on findings the described sanctions and to the association with any NASD that Fiske failed to respond to entry of findings that he negotiated member in any capacity. The NASD requests for information. and entered into a settlement sanction was based on findings (NASD Case #C01000024) agreement with public customers that Cunningham provided false to pay them $25,000 to resolve responses on his Form U-4. Pasquale Forti (CRD #2685740, their verbal complaints about the Cunningham also failed to respond Registered Principal, Hazlet, decline in value of their accounts, to NASD requests for information. New Jersey) submitted a Letter of without the knowledge or consent (NASD Case #C07000080) Acceptance, Waiver, and Consent of his member firm. in which he was fined $5,000,
NASD Notice to Members—Disciplinary Actions May 2001
306 Freeman’s suspension began April Letter of Acceptance, Waiver, and regarding his educational 16, 2001, and concluded at the Consent in which he was barred background and willfully failed close of business April 27, 2001. from association with any NASD to disclose information on his (NASD Case #C04010004) member in any capacity. Without Form U-4. admitting or denying the Gary Dale Fresk (CRD #1075245, allegations, Getter consented to Gorab’s suspension began April Registered Representative, the described sanction and to the 16, 2001, and will conclude at the Bellevue, Washington) submitted entry of findings that he engaged close of business April 15, 2003. a Letter of Acceptance, Waiver, in private securities transactions (NASD Case #C9B010013) and Consent in which he was fined away from his member firm and Donald Albert Gorneau (CRD $12,500 and suspended from failed to provide his firm with association with any NASD #1477882, Registered detailed written notice of the Representative, Winslow, Maine) member in any capacity for 10 transactions, his role therein, days. Without admitting or denying submitted a Letter of Acceptance, and to receive written permission Waiver, and Consent in which he the allegations, Fresk consented from his firm to engage in the to the described sanctions and was barred from association with transactions. (NASD Case any NASD member in any to the entry of findings that he #C8B010007) recommended the sale of capacity. Without admitting or $342,525 worth of mutual funds to Steven Douglas Goodman (CRD denying the allegations, Gorneau a public customer without having #1510905, Registered Principal, consented to the described reasonable grounds for believing Allison Park, Pennsylvania) was sanction and to the entry of that the recommendation was fined $75,000 and barred from findings that he received over suitable for the customer. The association with any NASD $60,000 from public customers to findings also stated that Fresk member in any capacity. The SEC invest in variable annuities and exercised discretionary power in affirmed the sanctions following traditional life insurance products, the customer’s account, without appeal of a November 1999 and, instead, converted the funds the customer’s prior written National Adjudicatory Council to his own use and benefit. (NASD authorization or without the written (NAC) decision. The sanctions Case #C11010012) acceptance of the account as were based on findings that Rocco Nick Graziosi (CRD discretionary by his member firm. Goodman used high-pressure #2590696, Registered tactics to induce sales, and Representative, Glen Cove, New Fresk’s suspension began April increased customer losses by 16, 2001, and concluded at the York) submitted a Letter of dissuading them from selling, Acceptance, Waiver, and Consent close of business April 25, 2001. and failed to execute sell orders. (NASD Case #C3B010003) in which he was fined $7,500 and (NASD Case #C9B960013) suspended from association with Harold Bailey Gallison, Jr. (CRD James Alan Gorab (CRD any NASD member in any capacity #1040211, Registered Principal, #2910909, Registered for three months. Without Las Vegas, Nevada) submitted Representative, Hoboken, New admitting or denying the an Offer of Settlement in which Jersey) submitted a Letter of allegations, Graziosi consented to he was barred from association Acceptance, Waiver, and Consent the described sanctions and to the with any NASD member in any in which he was fined $20,000 and entry of findings that he arranged capacity. Without admitting or suspended from association with to have another registered denying the allegations, Gallison any NASD member in any capacity representative sign new account consented to the described for two years. The fine must be forms falsely representing that the sanction and to the entry of paid before reassociating with any representative was the customers’ findings that he failed to abide NASD member following the account executive, failed to sign by an NASD Order that prohibited suspension or before requesting the forms as the customers’ him from associating with any relief from any statutory account executive and, thereby NASD member in a principal or disqualification. Without admitting caused his firm to maintain supervisory capacity. (NASD or denying the allegations, Gorab inaccurate books and records. Case #C02000027) consented to the described Furthermore, the NASD determined that Graziosi knowingly Jerry Lee Getter (CRD #1080528, sanctions and to the entry of findings that he submitted a false and improperly used the registered Registered Representative, representative’s executive number Brookville, Ohio) submitted a transcript to a member firm
NASD Notice to Members—Disciplinary Actions May 2001
307 for entering transactions in the sanctions and to the entry of firm prior to engaging in such customers’ account, thereby findings that he participated in activities. causing his member firm to private securities transactions and maintain inaccurate books and failed to give prior written notice to, Kamler’s suspension began May records. and to receive written approval 7, 2001, and will conclude at the from, his member firm prior to close of business July 5, 2001. Graziosi’s suspension began April engaging in such activities. (NASD Case #C04010007) 16, 2001, and will conclude July 15, 2001. (NASD Case Harris’ suspension began May 7, Dennis Lee Knuth (CRD #C9B010015) 2001, and will conclude August 4, #1769376, Registered 2001. (NASD Case #C07010020) Representative, Mosinee, Suzanne Marie Greany (CRD Wisconsin) submitted a Letter of #2488261, Registered Barbara Jennings (CRD Acceptance, Waiver, and Consent Representative, Wales, #3168111, Registered in which he was barred from Massachusetts) submitted a Representative, Plainsboro, New association with any NASD Letter of Acceptance, Waiver, and Jersey) submitted a Letter of member in any capacity. Without Consent in which she was barred Acceptance, Waiver, and Consent admitting or denying the from association with any NASD in which she was fined $5,000 and allegations, Knuth consented to member in any capacity. Without suspended from association with the described sanction and to the admitting or denying the any NASD member in any capacity entry of findings that he received allegations, Greany consented to for 30 days. The fine must be checks totaling $33,096 from a the described sanction and to the paid before reassociating with public customer intended for the entry of findings that she failed to any NASD member following the purchase of a life insurance respond to NASD requests for suspension or before requesting product and converted the funds information. (NASD Case relief from any statutory to his own use and benefit without #C11010011) disqualification. Without admitting the knowledge or consent of the or denying the allegations, customer. The findings also stated John Stephen Grosenheider Jennings consented to the that Knuth affixed the signatures of (CRD #2072154, Registered described sanctions and to the public customers to an insurance Representative, Austin, Texas) entry of findings that she failed policy withdrawal request, and was barred from association with to update her Form U-4. without their knowledge or any NASD member in any consent, affixed their signatures capacity. The sanction was based Jennings’ suspension began April to an $1,800 insurance proceeds on findings that Grosenheider 16, 2001, and will conclude at the check and converted the funds to failed to update his Form U-4. close of business May 15, 2001. his own use and benefit. (NASD Grosenheider also failed to (NASD Case #C9B010016) Case #C04010006) respond to NASD requests for information. (NASD Case Todd Joseph Kamler (CRD Kenneth Thomas Lambright #C06000022) #2720579, Registered (CRD #1124567, Registered Representative, Kearney, Representative, Baltimore, Mark Robert Harris (CRD Nebraska) submitted a Letter of Maryland) submitted an Offer of #2273482, Registered Acceptance, Waiver, and Consent Settlement in which he was Representative, Ft. Lauderdale, in which he was suspended from suspended from association with Florida) submitted a Letter of association with any NASD any NASD member in any capacity Acceptance, Waiver, and Consent member in any capacity for 60 for 20 business days. In light of the in which he was fined $7,500 and days. In light of the financial status financial status of Lambright, no suspended from association with of Kamler, no monetary sanction monetary sanctions were imposed. any NASD member in any capacity has been imposed. Without Without admitting or denying the for 90 days. The fine must be paid admitting or denying the allegations, Lambright consented before reassociating with any allegations, Kamler consented to the described sanction and to NASD member following the to the described sanction and the entry of findings that he suspension or before requesting to the entry of findings that he guaranteed a public customer relief from any statutory participated in private securities against loss. The findings also disqualification. Without admitting transactions and failed to give stated that Lambright failed to or denying the allegations, Harris prior written notice to, and receive respond to NASD requests for consented to the described written approval from, his member information.
NASD Notice to Members—Disciplinary Actions May 2001
308 Lambright’s suspension began association with any NASD Keith Allen Long (CRD April 16, 2001, and concluded at member in any capacity for one #1049701, Registered the close of business May 11, year. The fine must be paid before Representative, Selinsgrove, 2001. (NASD Case #C9A000033) reassociating with any NASD Pennsylvania) submitted an Offer member following the suspension of Settlement in which he was Eric Peter Lesak (CRD or before requesting relief from fined $5,000, suspended from #2390075, Registered any statutory disqualification. association with any NASD Representative, Wantagh, New Without admitting or denying the member in any capacity for one York) was censured, fined allegations, Lew consented to the month, and required to disgorge $15,000, and barred from described sanctions and to the $1,498, plus interest, in association with any NASD entry of findings that she forged a commissions earned to public member in any capacity. The fine customer’s signature on a Change customers. The fine payment and must be paid before reassociating of Financial Advisor Form without satisfactory proof of payment of with any NASD member. The the customer’s knowledge or disgorgements, plus interest, must sanctions were based on findings consent. The findings also stated be provided before reassociating that Lesak effected unauthorized that Lew submitted the form to an with any NASD member following transactions in the account of a investment company, thereby the suspension or before corporate customer without the becoming the registered requesting relief from any statutory knowledge, authorization, or representative of record with disqualification. Without admitting consent of the company’s respect to the customer’s mutual or denying the allegations, Long president. The findings also stated fund holdings. consented to the described that Lesak failed to respond to sanctions and to the entry of NASD requests to appear for on- Lew’s suspension began April 16, findings that he engaged in private the-record interviews. (NASD 2001, and will conclude at the securities transactions and failed Case #C10000087) close of business April 15, 2002. to provide his member firm with (NASD Case #C11010008) Michael Emmannuel Leventis prior written notice. (CRD #2269194, Registered Jang Soo Lim (CRD #2881926, Long’s suspension began May 7, Principal, Delray Beach, Florida) Registered Representative, 2001, and will conclude at the submitted a Letter of Acceptance, Forest Hills, New York) submitted close of business June 6, 2001. Waiver, and Consent in which he an Offer of Settlement in which he (NASD Case #C9A000037) was fined $40,000 and suspended was barred from association with from association with any NASD any NASD member in any Christopher Patrick Lordi (CRD member in any capacity for 10 capacity. Without admitting or #2518281, Registered business days. Without admitting denying the allegations, Lim Representative, Deerfield or denying the allegations, consented to the described Beach, Florida) was barred from Leventis consented to the sanction and to the entry of association with any NASD described sanctions and to the findings that he arranged for member in any capacity. The entry of findings that he made $15,000 in loans to be issued sanction was based on findings material misrepresentations of against the life insurance policy that Lordi failed to respond to fact to the NASD staff during its of a public customer without the NASD requests to appear for an investigation of a customer customer’s knowledge, on-the-record interview. (NASD complaint. authorization, or consent and Case #C07000023) converted and/or misused the loan Leventis’ suspension began May proceeds. The findings also stated Paul Lovrovich (CRD #2575457, 7, 2001, and will conclude at the that Lim forged the customer’s Registered Principal, Avenel, close of business May 18, 2001. signature on checks issued by the New Jersey) submitted a Letter (NASD Case #C07010015) insurance company to the of Acceptance, Waiver, and customer in connection with the Consent in which he was barred Stacey Lein Lew (CRD from association with any NASD #3215074, Registered loan. In addition, the NASD found that Lim failed to respond to NASD member in any capacity. Without Representative, Framingham, admitting or denying the Massachusetts) submitted a requests for information. (NASD Case #C10010019) allegations, Lovrovich consented Letter of Acceptance, Waiver, and to the described sanction and to Consent in which she was fined the entry of findings that he $5,000 and suspended from
NASD Notice to Members—Disciplinary Actions May 2001
309 attempted to conceal from his that Magpantay willfully provided entry of findings that he obtained member firm that he had canceled false responses on his Form U-4. funds aggregating $174,820.93 two trades made for his personal (NASD Case #C01000015) intended for investment and account by canceling and re-billing converted the funds to his own the trades to the account of a George Honorato Malagon, Jr. use and benefit. (NASD Case relative and then canceling and re- (CRD #2088064, Registered #C3A010011) billing the trades to his member Principal, Fresh Meadows, New firm’s error account. According to York) submitted an Offer of Jeffrey Scott Miller (CRD the findings, at the time Lovrovich Settlement in which he was fined #2375756, Registered canceled the trades, the stock $5,000 and suspended from Representative, Bellmore, New prices of both securities had association with any NASD York) submitted a Letter of declined, thereby allowing him to member in any capacity for 15 Acceptance, Waiver, and Consent avoid having to pay for the business days. Without admitting in which he was fined $7,500 and unfavorable trades. The NASD or denying the allegations, suspended from association with found that the firm paid for the Malagon consented to the any NASD member in any capacity costs of these transactions, described sanctions and to the for five business days. Without incurring a loss of approximately entry of findings that he failed to admitting or denying the $1,100. Lovrovich also provided disclose material facts to a public allegations, Miller consented to the false and misleading information to customer that a reasonably described sanctions and to the the NASD during an on-the-record prudent customer would have entry of findings that he posted interview. (NASD Case wanted disclosed in making communications on an electronic #C9B010021) investment decisions and that bulletin board concerning Malagon had a duty to disclose. customer securities without Gregory Paul Maggipinto The findings also stated that notifying the customers and (CRD #1042789, Registered Malagon executed unauthorized without identifying himself as a Representative, San Jose, trades in the account of a public registered representative. The California) was fined $107,734 customer without discretionary findings also stated that Miller and barred from association with trading authority. failed to inform the customers of a any NASD member in any potential conflict of interest, and capacity. The fine must be paid Malagon’s suspension began April failed to observe high standards of before any application for reentry 16, 2001, and concluded at the commercial honor, and just and into the securities industry will be close of business May 4, 2001. equitable principles of trade. considered. The sanctions were (NASD Case #CAF000046) Furthermore, the NASD found that based on findings that Maggipinto Frank Edward Mandrell (CRD Miller posted a communication on executed unauthorized #3100112, Registered an electronic bulletin board that transactions in a deceased Representative, West Palm contained untrue, unwarranted, customer’s account and Beach, Florida) was barred from and misleading statements, made fraudulently obtained discretionary association with any NASD false price predictions without a trading authority from the member in any capacity. The reasonable basis, and failed to customer’s survivors by sanction was based on findings provide the investor with a sound representing that he had been that Mandrell failed to respond to basis for making an investment given power of attorney over the NASD requests for information. decision. account. Maggipinto also failed (NASD Case #C07000078) to respond to NASD requests to Miller’s suspension began May 7, appear for an on-the-record Andrew Dwayne Miller (CRD 2001, and concluded at the close interview. (NASD Case #2002981, Registered of business May 11, 2001. (NASD #C01000026) Representative, Canon City, Case #CMS010031) Colorado) submitted a Letter of Daniel Lewis Minor (CRD Arnold Lopez Magpantay Acceptance, Waiver, and Consent (CRD #2812805, Registered #1075162, Registered in which he was barred from Representative, St. Joseph, Representative, Sacramento, association with any NASD California) was barred from Missouri) submitted a Letter of member in any capacity. Without Acceptance, Waiver, and Consent association with any NASD admitting or denying the member in any capacity. The in which he was fined $5,000 and allegations, Miller consented to the suspended from association with sanction was based on findings described sanction and to the
NASD Notice to Members—Disciplinary Actions May 2001
310 any NASD member in any capacity admitting or denying the capacity. The sanction was based for 30 days. Without admitting or allegations, Murphy consented on findings that Nunez executed denying the allegations, Minor to the described sanction and to unauthorized transactions in the consented to the described the entry of findings that he account of a public customer sanctions and to the entry of participated in private securities and failed to respond to NASD findings that he engaged in private transactions and failed to give prior requests for information. (NASD securities transactions without written notice to, and to receive Case #C10000174) prior written notice to, and written approval from, his member approval from, his member firm. firm prior to engaging in such Richard Bruce O’Callaghan activities. (NASD Case (CRD #1707271, Registered Minor’s suspension began April #C02010006) Representative, Freehold, New 16, 2001, and will conclude at the Jersey) submitted a Letter of close of business May 15, 2001. Rachel Ellen Neufeld (CRD Acceptance, Waiver, and Consent (NASD Case#C04010010) #2699457, Registered in which he was fined $27,500 and Representative, Collingswood, suspended from association with Gregory Vincent Morgan New Jersey) submitted a Letter of any NASD member in any capacity (CRD #2334270, Registered Acceptance, Waiver, and Consent for one year. The fine must be Representative, Baldwin, New in which she was fined $40,000 paid before reassociating with York) was fined $50,000, and suspended from association any NASD member following the suspended from association with with any NASD member in any suspension or before requesting any NASD member in any capacity capacity for two years. The fine relief from any statutory for two years, and ordered to pay must be paid before reassociating disqualification. Without admitting $69,230, plus interest, in restitution with a member firm following the or denying the allegations, to a public customer for effecting suspension or before requesting O’Callaghan consented to the unauthorized securities relief from any statutory described sanctions and to the transactions. In addition, Morgan disqualification. Without admitting entry of findings that he willfully was barred from association or denying the allegations, Neufeld failed to disclose a material fact with any NASD member in any consented to the described on a Form U-4, and provided false capacity for making unsuitable sanctions and to the entry of and misleading testimony to the recommendations and engaging in findings that she participated in NASD during an on-the-record excessive trading, and failing to private securities transactions and interview. respond to NASD requests for failed to provide her member firm information. The sanctions were with written notice of the proposed O’Callaghan’s suspension began based on findings that Morgan transactions, her proposed role May 7, 2001, and will conclude at effected unauthorized securities therein, and whether she had the close of business May 6, 2002. transactions in the account of received, or might receive, selling (NASD Case #C9B010024) a public customer. Morgan compensation in connection with also made unsuitable Peter David Ragofsky (CRD the transactions. The findings also #2066034, Registered recommendations, including stated that Neufeld engaged in recommendations to trade Representative, Brooklyn, New business activity for compensation York) was barred from association excessively, to a public customer. outside the scope of employment In addition, Morgan failed to with any NASD member in any with her member firm and failed to capacity and ordered to pay respond to NASD requests for provide her member firm with information. $15,956, plus interest, in restitution prompt written notice. to public customers. The sanctions Morgan’s bar became effective Neufeld’s suspension began May were based on findings that March 20, 2001. (NASD Case 7, 2001, and will conclude at the Ragofsky effected unauthorized #C9B000024) close of business May 6, 2003. transactions in the accounts of (NASD Case #C9A010008) public customers. (NASD Case Jay Lynn Murphy (CRD #343227, C10000086) Registered Representative, Van Becky Maria Nunez (CRD Nuys, California) submitted a #2313048, Registered Juanita Rios (CRD #4175638, Letter of Acceptance, Waiver, and Representative, Brooklyn, New Associated Person, Wilmington, Consent in which he was barred York) was barred from association Delaware) was fined $10,000 and from association with any NASD with any NASD member in any suspended from association with member in any capacity. Without any NASD member in any capacity
NASD Notice to Members—Disciplinary Actions May 2001
311 for 30 business days for providing that contained material his own use and benefit, without a false response on her Form U-4 misrepresentations. the customer’s knowledge or and barred from association with consent. Rothstein also failed to any NASD member in any capacity Rising’s suspension will begin respond to NASD requests for for failing to respond to NASD June 1, 2001, and will conclude information. (NASD Case requests for information. The fine June 30, 2001. (NASD Case #C9B010014) must be paid before reassociating #C3A000012) with a member firm. The sanctions Brad Lee Running (CRD Samuel Michael Rodio, II (CRD #1490783, Registered were based on findings that Rios #2919945, Registered failed to respond to NASD Representative, Owatonna, Representative, Katy, Texas) Minnesota) submitted a Letter of requests for information and submitted an Offer of Settlement provided a false response on her Acceptance, Waiver, and Consent in which he was barred from in which he was fined $2,500 and Form U-4 application for association with any NASD registration. suspended from association with member in any capacity. Without any NASD member in any capacity Rios’ bar became effective admitting or denying the for 10 business days. Without March 29, 2001. (NASD Case allegations, Rodio consented to admitting or denying the #C9A000041) the described sanction and to the allegations, Running consented to entry of findings that funds in the the described sanctions and to the Martin Lee Rising (CRD amount of $5,312.98 were entry of findings that he negotiated #1011762, Registered withdrawn from the account of and entered into a settlement Representative, Paradise Valley, public customers without their agreement with public customers Arizona) submitted an Offer of knowledge, authorization, or to pay them $6,317.27 to resolve Settlement in which he was fined consent, and a check in the same their verbal complaint about the $15,000 and suspended from amount and in the name of the decline in value of their account, association with any NASD customers was issued to and without the knowledge or consent member in any capacity for one received by Rodio. The NASD of his member firms. month. Rising is also required to determined that Rodio failed to demonstrate to the NASD, not deliver the check, and, instead, Running’s suspension began April more than 90 days after the endorsed it and deposited the 16, 2001, and concluded at the issuance of the Order of funds into his personal bank close of business April 27, 2001. Acceptance of the Offer of account, without the customers’ (NASD Case #C04010009) Settlement, that an offer of knowledge, authorization, or rescission has been made to consent. Rodio also failed to Julian Gaspar Russo (CRD investors in an offering of respond completely to NASD #407793, Registered securities. Without admitting or requests for information and Representative, East Islip, New denying the allegations, Rising documentation. (NASD Case York) submitted an Offer of consented to the described #C06000039) Settlement in which he was sanctions and to the entry of suspended from association with findings that in connection with a Andrew Calvin Rothstein (CRD any NASD member in any capacity private placement, he failed to #1187031, Registered for two years. Without admitting or return investor funds when the Representative, Jackson, New denying the allegations, Russo minimum sales contingency was Jersey) submitted a Letter of consented to the described not satisfied, and continued to Acceptance, Waiver, and Consent sanction and to the entry of solicit and accept purchases of the in which he was barred from findings that he received $13,000 securities in a private placement association with any NASD from public customers for after the minimum sales member in any capacity. Without investment purposes but failed contingency was not satisfied and admitting or denying the to invest the funds, thereby, the funds received from investors allegations, Rothstein consented misusing the customers’ funds. were in the possession and control to the described sanction and to the entry of findings that he Russo’s suspension began April of the firm prior to the satisfaction 16, 2001, and will conclude at the of the minimum sales contingency. arranged for a $3,000 check to be issued from a public customer’s close of business April 15, 2003. The findings also stated that (NASD Case #C05000036) Rising distributed offering annuity account, endorsed the materials to prospective investors check, and converted the funds for
NASD Notice to Members—Disciplinary Actions May 2001
312 Robert Joseph Sampson Gerard Vincent Sherlock, Sr. another registered representative (CRD #1051109, Registered (CRD #2629144, Registered to be the agent on record for the Representative, Rochdale, Representative, Cherry Hill, New sale and agreed to share the Massachusetts) submitted a Jersey) submitted a Letter of commissions because Smith’s Letter of Acceptance, Waiver, and Acceptance, Waiver, and Consent earnings were subject to a Consent in which he was barred in which he was fined $10,000 and garnishment order. The findings from association with any NASD suspended from association with also stated that the policy never member in any capacity. Without any NASD member in any capacity took effect and Smith induced a admitting or denying the for three months. The fine must registered representative at allegations, Sampson consented be paid before reassociating with another firm to place the policy to the described sanction and to any NASD member following the through that agent’s firm and to the entry of findings that he suspension or before requesting remit the bulk of the commission to misappropriated at least $87,000 relief from any statutory Smith. in cash proceeds from the disqualification. Without admitting accounts of public customers and or denying the allegations, Smith’s suspension began May 7, improperly converted the proceeds Sherlock consented to the 2001, and concluded at the close for his own use and benefit. described sanctions and to the of business May 11, 2001. (NASD (NASD Case #C11010009) entry of findings that he Case #C9A010005) participated in private securities Daniel Christopher Stearns Daniel Carmine Santoro (CRD transactions, for compensation, #2211387, Registered (CRD #1888242, Registered without prior written notice to, or Representative, Colonie, New Representative, Douglaston, approval from, his member firms. New York) submitted a Letter of York) submitted a Letter of Acceptance, Waiver, and Consent Sherlock’s suspension began May Acceptance, Waiver, and Consent in which he was barred from 7, 2001, and will conclude at the in which he was fined $17,000, of association with any NASD close of business August 6, 2001. which $12,000 represents member in any capacity and (NASD Case #C3A010004) disgorgement of commissions, and ordered to pay $2,422.05 in suspended from association with restitution to his former member Paul Carl Sildatke (CRD any NASD member in any capacity firm. Without admitting or denying #2910292, Registered Principal, for two months. Without admitting the allegations, Santoro consented Morris Plains, New Jersey) was or denying the allegations, Stearns to the described sanctions and to barred from association with any consented to the described the entry of findings that he NASD member in any capacity. sanctions and to the entry of converted $25,000 from a public The sanction was based on findings that he engaged in private customer by obtaining a check findings that Sildatke failed to securities transactions without payable to the customer and respond to NASD requests for prior written notice to, or approval depositing it in his personal information. (NASD Case from, his member firm. #C9B000028) checking account without the Stearns’ suspension will begin customer’s knowledge or Geiger Merrill Smith, Jr. (CRD June 1, 2001, and will conclude at authorization. The findings stated #427616, Registered the close of business July 31, that Santoro forged the required Representative, Newtown 2001. (NASD Case #C11010013) signature on the check so that he Square, Pennsylvania) submitted could deposit it into his personal a Letter of Acceptance, Waiver, Christopher Lynn Thomas bank account. The NASD also and Consent in which he was fined (CRD #3152007, Registered found that Santoro caused credit $5,000 and suspended from Representative, Pembroke cards to be opened under the association with any NASD Pines, Florida) was barred from names and social security member in any capacity for five association with any NASD numbers of public customers, business days. Without admitting member in any capacity. The directed the bills be sent to his or denying the allegations, Smith sanction was based on findings home address, and named himself consented to the described that he failed to respond to NASD as the secondary card holder sanctions and to the entry of requests to appear for an on-the- without their knowledge or findings that he sold a variable record interview. (NASD Case authorization. (NASD Case universal life insurance policy to a #C07000077) #C10010043) public customer, and induced
NASD Notice to Members—Disciplinary Actions May 2001
313 Vincent Bernard Tolbert (CRD entry of findings that he rendered which he was the sole owner, that #2343655, Registered substantial assistance to his contained misrepresentations Representative, Killeen, Texas) member firm and its CEO by regarding the corporation. The was barred from association with executing orders and carrying out findings also stated that Woodward any NASD member in any all basic trading functions relating issued a press release on the capacity. The sanction was based to the trading activities of the Internet regarding another on findings that Tolbert received common stock of a company that company and failed to disclose $260 in cash from a public were designed to deceive or that he owned shares of the customer representing premium defraud public customers in spite company. payments for a homeowner’s of a general awareness that his insurance policy and converted the role was improper. Woodward’s suspension began funds to his own use and benefit, April 16, 2001, and will conclude at without the authorization, Vega’s suspension began April 16, the close of business October 15, knowledge, or consent of the 2001, and will conclude at the 2001. (NASD Case #C07990068) customer. Tolbert also failed to close of business June 14, 2001. (NASD Case #CAF010006) respond to NASD requests for Decisions Issued information. (NASD Case Stephen Morris Wilkinson (CRD #C06000034) The following decisions have been #718506, Registered issued by the DBCC or the Office Alto Lee Tompkins, Jr. (CRD Representative, Pace, Florida) of Hearing Officers and have been #2882915, Registered was barred from association appealed to or called for review by Representative, Chicago, with any NASD member in any the NAC as of April 13, 2001. The Illinois) was barred from capacity. The sanction was findings and sanctions imposed in association with any NASD based on findings that Wilkinson the decisions may be increased, member in any capacity. The instructed a public customer to decreased, modified, or reversed sanction was based on findings complete checks totaling by the NAC. Initial decisions that Tompkins provided false $23,345.31 to be used to purchase whose time for appeal has not yet responses on his Form U-4. shares in mutual funds. Instead of expired will be reported in the next (NASD Case #C8A000065) arranging an electronic transfer of Notices to Members. the customer’s funds to the mutual Robert Frank Toth (CRD funds, Wilkinson filled in his own Mark Joseph Chavez (CRD #2320179, Registered Principal, name as payee on the checks, #2411119, Registered Principal, Rosedale, New York) was barred endorsed them, and deposited Boca Raton, Florida) was barred from association with any NASD them into his own bank account. from association with any NASD member in any capacity. The Wilkinson also failed to respond to member in any capacity. The sanction was based on findings an NASD request for information. sanction was based on findings that Toth failed to respond to (NASD Case #C07000074) that Chavez failed to respond to NASD requests for testimony and NASD requests for information. documents. (NASD Case Craig Henry Woodward #CAF000014) (CRD #1955883, Registered Chavez has appealed this action Representative, West Palm to the NAC, and the sanctions are Juan Carlos Vega (CRD Beach, Florida) submitted a not in effect pending consideration #2150200, Registered Letter of Acceptance, Waiver, of the appeal. (NASD Case Representative, Miami, Florida) and Consent in which he was #C07000084) submitted a Letter of Acceptance, suspended from association Waiver, and Consent in which he with any NASD member in any Luther Allen Hanson (CRD was fined $15,000, suspended capacity for six months. In light of #1956960, Registered from association with any NASD Woodward’s financial status, no Representative, Charleston, member in any capacity for 60 monetary sanction was imposed. West Virginia) was suspended days, and ordered to cooperate Without admitting or denying the from association with any NASD with the NASD in any related allegations, Woodward consented member in any capacity for 90 investigation and hearing. to the described sanction and to days, required to requalify as a Without admitting or denying the the entry of findings that he issued general securities representative allegations, Vega consented to the press releases on the Internet in within six months, and directed described sanctions and to the the name of a corporation in, to disgorge $79,105.62 in commissions to public customers.
NASD Notice to Members—Disciplinary Actions May 2001
314 If it is proven that any customers the initiation of a formal executed unauthorized trades in have recouped their investments, proceeding by the NASD in which the accounts of public customers the commissions relating to such findings as to the allegations in the without the discretionary trading customers shall be converted to a complaint have not been made, authority for the accounts. The fine to be paid to the NASD. The and does not represent a decision complaint further alleges that sanctions were based on findings as to any of the allegations Boyce made material omissions that Hanson participated in the contained in the complaint. and misrepresentations and offer and sale of securities without Because these complaints are engaged in high-pressure sales prior written notice to, or approval unadjudicated, you may wish to tactics in attempting to solicit from, his member firm. contact the respondents before public customers to purchase drawing any conclusions regarding stocks. In addition, the complaint This case has been called for the allegations in the complaint. alleges that Boyce effected review by the NAC, and the transactions in and/or induced the sanctions are not in effect pending James J. Black, Jr. (CRD purchase or sale of securities by consideration of the review. #1487059, Registered means of manipulative, deceptive, (NASD Case #C9A000027) Representative, Germantown, and other fraudulent devices and Tennessee) was named as a Paul John Hoeper (CRD contrivances. (NASD Case respondent in an NASD complaint #CAF010007) #2318477, Registered alleging that he received Representative, Coronoa Del $57,839.70 in funds from a public Lee Edward Bridges Mar, California) was barred from customer, deposited the funds into (CRD #1509183, Registered association with any NASD an account he controlled, and Representative, McComb, member in any capacity. The converted the funds to his own use Mississippi) was named as a sanction was based on findings and benefit without the customer’s respondent in an NASD complaint that Hoeper failed to respond to knowledge or consent. The alleging that he engaged in NASD requests for information. complaint also alleges that Black business activities outside the Hoeper has appealed this action failed to respond to an NASD scope of his relationship with a to the NAC, and the sanction is request to provide on-the-record member firm and failed to give not in effect pending consideration testimony. (NASD Case prior written notice to his firm. The of the appeal. (NASD Case #C05010024) complaint also alleges that Bridges #C02000037) received $1,000 from a public Patrick James Boyce (CRD customer to open Individual Jack Harry Stein (CRD #2388578, Registered Principal, Retirement Accounts (IRAs) on #1233359, Registered East Setauket, New York) was behalf of the customer’s minor Representative, West Palm named as a respondent in an sisters, neglected to open the Beach, Florida) was fined NASD complaint alleging that he IRAs, and, instead, converted the $25,000 and suspended from directly and/or indirectly, singly funds to his own use and benefit, association with any NASD and in concert, by use of the without the knowledge or consent member in any capacity for one means or instrumentalities of of the customer. (NASD Case year. The sanctions were based interstate commerce, or of the #C05010021) on findings that Stein made mails, and in connection with the unsuitable recommendations to a purchase and sale of securities, Dane Stephen Faber (CRD public customer. knowingly or recklessly engaged #1020637, Registered in, and/or induced others to Principal, Sausalito, California), Stein has appealed this action to engage in a device, scheme, or Grace Patricia Stoneham the NAC, and the sanctions are artifice to defraud, the use of an (CRD #1068378, Registered not in effect pending consideration untrue statement of material fact Representative, San Francisco, of the appeal. (NASD Case and/or the omission of material California) and Monty Reasor #C07000003) facts necessary to make Myler (CRD #1922281, statements made, in light of the Registered Principal, Palm circumstances, not misleading, Beach Gardens, Florida) were Complaints Filed and acts, practices, or courses of named as respondents in an The following complaints were business that operated as a fraud NASD complaint alleging that they, issued by the NASD. Issuance of a or deceit upon persons. The by the use of instrumentalities of disciplinary complaint represents complaint also alleges that Boyce interstate commerce, or of the
NASD Notice to Members—Disciplinary Actions May 2001
315 mails, made material and engaged in acts, practices, or customer’s funds in an account at misrepresentations and omitted courses of business that operated his firm and purchasing long-term to state material facts about a as a fraud or deceit upon a public investments for the customer, company; effected transactions customer. The complaint also and used $103,323.83 for some in, or induced the purchase or alleges that Goldberg effected purpose other than for the benefit sale of, a security by means of transactions in the accounts of of the customer. The complaint a manipulative, deceptive, or public customers without their also alleges that Rhodes failed fraudulent device; and failed to prior knowledge, authorization, or to respond to NASD requests for observe high standards of consent. In addition, the complaint information. (NASD Case commercial honor and just and alleges that, in an effort to induce #C8A010025) equitable principles of trade. The the customer to ratify unauthorized complaint alleges that each of the transactions, Goldberg Nathan James Smith (CRD respondents solicited indications intentionally and/or recklessly #1946055, Registered of interest for a common stock made material, misleading, and Representative, Chatham, by falsely representing that the false representations that were New Jersey) was named as a company would be selling the without a reasonable basis and respondent in an NASD complaint stock through an IPO, failed failed to disclose to the customer alleging that he failed to respond to conduct an adequate inquiry material information. The to NASD requests for information. into the company before complaint further alleges that The complaint also alleges that recommending purchase of the Goldberg failed to execute the Smith improperly converted security to public customers, and sell orders of public customers. $200,000 in funds received from recklessly disregarded publicly Moreover, the complaint alleges public customer intended for available information that indicated that Goldberg failed to accurately investment purposes to his own the shares were not being offered record on the books and records use and benefit. (NASD Case through an IPO. The complaint of his member firm the residential #C9B010019) also alleges that the respondents address of a public customer, and Guy Anthony Zarrilli (CRD made baseless and improper circumvented Indiana Blue Sky #2194074, Registered Principal, price predictions and assurances laws by preparing a new account Point Pleasant, New Jersey) of success about the stock. The form for a customer using the was named as a respondent in complaint further alleges that home address of the customer’s an NASD complaint alleging Faber made unsuitable father in another state. (NASD that he made unsuitable recommendations to a public Case #C10010042) recommendations to public customer and made unsuitable customers. The complaint also transactions in her account in Mohamed Imran Hussain (CRD #2287607, Registered alleges that Zarrilli lacked light of her investment objectives, reasonable grounds to believe financial situation, and needs. In Representative, Staten Island, New York) was named as a that his recommendations were addition, the complaint alleges that suitable for the customers in Myler failed to pay an NASD respondent in an NASD complaint alleging that he guaranteed a light of their ages, need for arbitration award. (NASD Case income, the speculative nature of #CAF010009) customer against loss. (NASD Case #C10010046) the transactions, and the size of Mitchell Louis Goldberg (CRD the transactions in comparison to #1386682, Registered Principal, Bruce William Rhodes (CRD the value of the accounts. (NASD Syosset, New York) was named #2690462, Registered Case #C9A010007) as a respondent in an NASD Representative, Rochester, Illinois) was named as a Matthew Laurence Zimmerman complaint alleging that, in (CRD #1800015, Registered connection with the purchase or respondent in an NASD complaint alleging that he received $795,500 Representative, Morris Plains, sale of a security, he intentionally, New Jersey) was named as a knowingly, or recklessly employed from a public customer with instructions that the funds be respondent in an NASD complaint a device, scheme, contrivance, alleging that he engaged in and artifice to defraud; omitted to used to purchase short-term investments. The complaint unauthorized trading in the state material facts necessary to accounts of public customers, make the statements made, in light alleges that Rhodes failed to follow the customer’s instructions by made untrue statements of of the circumstances under which material facts, and omitted to they were made, not misleading; depositing $692,176.17 of the
NASD Notice to Members—Disciplinary Actions May 2001
316 state material facts to customers Stellar Investments, Inc. Hawley, Matthew causing them to lose almost Tampa, Florida Sleepy Hollow, New York $55,000 in their accounts, while (April 12, 2001) (April 12, 2001) collecting over $9,000 in commissions. The complaint also UFI Securities, Inc. alleges that Zimmerman failed to Dublin, California Individuals Suspended respond to NASD requests to (April 12, 2001) Pursuant To NASD Rule 9540 appear for on-the-record Series For Failure To Provide Weston Capital Markets, Inc. Information Requested interviews. (NASD Case New York, New York #C9B010027) Under NASD Rule 8210. (April 12, 2001) (The date the suspension began is listed after the Firms Suspended For Failure Firms Suspended Pursuant entry.) To Supply Financial To NASD Rule Series 9510 Chapman, David R. Information For Failure To Comply With Kemblesville, Pennsylvania The following firms were An Arbitration Award Or A (April 10, 2001) suspended from membership in Settlement Agreement Delia, Carl the NASD for failure to comply with Ashland Global Securities, LLC formal written requests to submit Hicksville, New York New York, New York (April 11, 2001) financial information to the NASD. (March 27, 2001) The actions were based on the Friedman, Roy H. provisions of NASD Rule 8210 and Lloyd Wade Securities, Inc. Long Beach, California Article VII, Section 2 of the NASD Dallas, Texas (March 26, 2001) By-Laws. The date the suspension (April 2, 2001) commenced is listed after the Holliman, III, Joe L. entry. If the firm has complied with Austin, Texas the requests for information, the Individuals Whose (April 2, 2001) listing also includes the date the Registrations Were Revoked suspension concluded. For Failure To Pay Fines, King, Larry Richard Costs And/Or Provide Proof Sacramento, California Beacon Trading, L.L.C. Of Restitution In Connection (March 21, 2001) San Jose, California With Violations (April 12, 2001) Manzanares, Joseph L. Testino, Jr., Charles W. Denver, Colorado Bemos Investment Tucson, Arizona (April 16, 2001) Advisors, L.L.C. (April 11, 2001) Newton, Barry James Deerfield, Illinois Vahab, Ray (April 12, 2001) Long Beach, California New York, New York (April 11, 2001) Bennett, Mullaney & Co., Inc. (April 11, 2001) Warren, Vermont Quinn, John T. (April 12, 2001) Louisville, Kentucky Individuals Barred Pursuant (March 15, 2001) C.B. Hill & Associates, Inc. To NASD Rule 9540 Series Jacksonville, Florida For Failure To Provide Rogers, Jason (April 12, 2001) Information Requested Under Rosedale, New York NASD Rule 8210. (The date (April 2, 2001) Crimson Securities LLC the bar became effective is New York, New York listed after the entry.) Valasquez, Reynaldo C. (April 12, 2001) Corpus Christi, Texas Crenshaw, Michael (March 22, 2001) Investor’s Advocate, LLC Brooklyn, New York Grand Blanc, Michigan (April 16, 2001) Washington, Doris Payne (April 12, 2001) Glen Allen, Virginia (April 4, 2001)
NASD Notice to Members—Disciplinary Actions May 2001
317 Individuals Suspended customer make the exchange, is the sale of Class B shares. The Pursuant To NASD Rule approximately $225,000, which sales commissions would have Series 9510 For Failure To will be paid jointly by Stifel and been less than half this amount Comply With An Arbitration Grimes. had they sold Class A shares. Award Or A Settlement Agreement Mutual funds can be offered for In another instance, NASD sale to investors in different Regulation found that Grimes The date the registration was classes. In this case, the Class A recommended to 29 customers suspended is included after shares incurred a front-end sales that they liquidate another mutual entry. If the individual has load, but had lower on-going fund and purchase, in the complied, the listing also includes expenses than Class B shares. aggregate, over $500,000 of Class the date the suspension was lifted. Customers who purchased Class B shares. Again, the customers Bernstein, Andrew S. B shares did not pay a sales were eligible to purchase Class A Merrick, New York charge at the time of purchase, shares, the more cost-effective (March 30, 2001) but may have paid a charge when purchase at the time because of a they sold their shares, unless the temporary marketing promotion Burton, Gregory M. held them for six years. B Shares offered by the fund that eliminated Locust Valley, New York also incurred higher on-going a sales load at either the time of (March 28, 2001 - April 16, 2001) distribution expenses than Class purchase or the time of sale. Stifel A shares. and Grimes earned $21,000 on the Carroll, Jeffrey C. sale of these Class B shares, and Highland Beach, Florida Over a two-year period, NASD would not have earned any sales (March 22, 2001) Regulation found that Grimes commission had they sold Class A engaged in a pattern of making shares. NASD Regulation Censures unsuitable recommendations of and Fines Stifel, Nicolaus & Class B shares to customers. He As a result of the NASD Company, and Two Individuals recommended that each of 15 disciplinary action, Grimes has for the Unsuitable Sale of Class customers purchase over been suspended for 30 days and B Mutual Fund Shares $250,000 in Class B shares, when will pay a fine of $30,000. Lasko NASD Regulation has censured it would have been more cost- has been suspended for 10 days and fined Stifel, Nicolaus & effective for those customers to in a supervisory capacity, and has Company, Inc. of St. Louis, MO, purchase Class A shares. In fact, been fined, together with the firm, and two individuals, Michael G. the fund had a maximum purchase $25,000. Stifel has agreed to pay Grimes and his supervisor, William limitation of $250,000 in Class B a total fine of $41,000, which J. Lasko, for violating NASD rules shares. NASD Regulation found includes the violations noted in connection with the sale of that recommendations to purchase above. Both the firm and the two Class B mutual fund shares. over $250,000 in Class B shares respondents have neither admitted NASD Regulation found that exceeded the maximum purchase nor denied the allegations, but between June 1996 and May limitation and were unsuitable in have consented to the entry of 1998, Grimes made unsuitable light of the amount sold, the sales findings pursuant to the sales totaling over $7 million to 44 and distribution charges incurred settlement. customers in Class B mutual fund and because the customers could have purchased the A Shares with NASD Regulation Fines Banc shares, and that Lasko and the One Capital Markets, Inc. $1.8 firm failed to supervise Grimes substantially lower sales charges. Stifel failed to supervise by not Million For Net Capital, with respect to these unsuitable Customer Reserve, and sales. having a system in place to detect sales in excess of the maximum Recordkeeping Violations As part of a settlement with the purchase limits on the funds it NASD Regulation has censured NASD, Stifel has agreed to sold. and fined Banc One Capital exchange the Class B shares sold Markets, Inc., $1.8 million for to these customers for Class A NASD Regulation found that Stifel and Grimes earned sales inadequate net capital, insufficient shares at no charge. The cost of customer reserves, and inaccurate this restitution offer, should every commissions of over $290,000 or four percent of the purchase on books and records. Banc One, a
NASD Notice to Members—Disciplinary Actions May 2001
318 broker/dealer subsidiary of Bank Although required to do so by One Corporation, a bank holding federal securities laws, Banc One company, entered into a failed to promptly notify regulators settlement with NASD Regulation that its books and records were in which the firm neither admitted unreliable. The firm also failed to nor denied the allegations. give proper notice that it was conducting a securities business NASD Regulation found that Banc with inadequate net capital, and One operated from February 1999 that its customer reserve account through August 1999 without a was deficient. Maintaining reliable reliable accounting system. The records, adequate net capital and violations occurred after a customer reserves are critical to conversion of Banc One’s investor confidence, protection computerized securities and overall market integrity. processing and accounting software in early 1999. The In resolving this matter and conversion caused numerous imposing these sanctions, NASD accounting entries to post Regulation took into consideration incorrectly. As a result, account Banc One’s cooperation during the balances in the firm’s general investigation, that the firm’s ledger did not match the reconciliation process showed underlying transaction data customer accounts were not balances. Banc One was unable to impacted, and the steps the firm reconcile these differences took to restructure its operations. promptly, and by March 1999 the This case resulted from an dollar amount of the differences investigation conducted by NASD exceeded $1 billion. The total Regulation’s Chicago District number of unreconciled items Office. increased from 1,000 in April 1999 to over 4,000 by July 1999. Banc One failed to treat the © 2001, National Association of Securities Deal- ers, Inc. (NASD). All rights reserved. Notices to accounting differences properly Members attempt to present information to read- when it prepared and reported its ers in a format that is easily understandable. net capital and customer reserve However, please be aware that, in case of any computations. Instead of treating misunderstanding, the rule language prevails. each difference on a gross basis, as is required, Banc One calculated its net capital and customer reserve using the aggregate net of all differences. The firm’s improper accounting treatment of these differences caused Banc One to operate from February 1999 through August 1999 with net capital deficiencies ranging from $520 million to $1.27 billion, and customer reserve account deficiencies ranging from $380 million to $1.05 billion.
NASD Notice to Members—Disciplinary Actions May 2001
319