FINRA disciplinary action update #36

Disciplinary decisions issued October 27 – November 2, 2023.

Former securities representative suspended and fined for allegedly failing to disclose unsatisfied judgments

Five unsatisfied judgments totalling $320,000 were not disclosed or belatedly disclosed on Form U4. In addition the representative falsified a receipt that he submitted to the firm by backdating the payment date.

FINRA Rule 1122
FINRA Rule 2010

Former securities representative suspended and fined for allegedly making unsuitable investment recommendations

Speculative alternative investments were recommended to three customers. These recommendations were “unsuitable in light of the customers’ investment profiles”.

FINRA Rule 2010
FINRA Rule 2111

Former CEO, CCO and majority owner of Richfield Orion International charged with allegedly failing to comply with Reg BI requirements

The firm did not have in place WSPs reasonably designed to achieve compliance with Reg BI, specifically in connection with excessive and unsuitable trading. The CCO, as the sole member of the firm’s compliance department, failed to identify or respond to red flags indicating potential excessive trading in two customer accounts. In addition the CCO failed to appear for on-the-record testimony.  

This is a complaint and not an AWC.

FINRA Rule 2010
FINRA Rule 2111
FINRA Rule 3110
FINRA Rule 8210
Reg BI
Rule 15l-1

Former securities representative suspended and fined for allegedly engaging in investment banking activity without registering with FINRA

The former representative engaged in the activity while employed as a CEO of the parent company, which was the beneficial owner of Cabot Lodge and Purshe Caplan Sterling Investment.

At Cabot Lodge he provided advice on how an offering should be structured, facilitated due diligence for the offering and assisted with the preparation of the offering materials. In connection with another offering he directed the sending of an engagement letter to the issuer, attended meetings and calls, signed a non-disclosure agreement and marketed the offering to an investment firm.

At Purshe Kaplan he acted in a principal capacity and was involved in the hiring and attempted firing of several employees including those at an executive level. He also directed wire transfers, the payment of individuals bills and expensed hundreds of thousands of dollars of business expenses. All without being registered with FINRA as a principal of the firm.

FINRA Rule 1210
FINRA Rule 2010

Securities representative suspended and fined for participating in private securities transactions without notifying his firms

FINRA Rule 2010
FINRA Rule 3280

Unless otherwise noted all respondents accepted and consented to FINRA’s findings without admitting or denying them.