California Stockbroker Discipline Report for September - December 2011

January 16, 2012

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for warning_flag.jpgThe following information regarding broker misconduct and disciplinary actions taken against California stockbrokers was released by the Financial Industry Regulatory Authority (FINRA) for the period September through December 2011:

September 2011

John-Eric Bonilla, formerly with U.S. Bancorp Investments Inc., in Sacramento, California, was barred from association with any FINRA member in connection with finding that Bonilla failed to respond to FINRA requests for information related to a claim that Bonilla falsified documents in which he overstated an investor's net worth, annual income, and investment experience and misstated the fee associated with investor's security instrument.

Jerry Jason Rice, formerly with WAMU Investments, Inc., in Fresno, California, was barred from association with any FINRA member in connection with a finding that Rice failed to respond to FINRA requests for information related to allegations that he made misrepresentations and engaged in unauthorized and unsuitable trades.

October 2011

Vikas Goel, with Newport Cost Securities, Inc., in Irvine, California, was fined $7,500 and suspended from association with any FINRA member in connection with findings that Goel placed a customer's signature on statements he prepared without the customer's knowledge, authorization, or consent as a rationale for recommending the customer sell mutual funds to invest the proceeds in various annuities.

Jo Ann Marie Head, formerly with Morgan Stanley Smith Barney in Whittier, California, was barred from association with any FINRA member and ordered to pay restitution to a customer in the amount of $19,000, which represented a loan granted Head by a customer. FINRA further found that Head conveyed false and exaggerated account values to customers, exercised discretion in customer accounts without authorization, and mischaracterized unsolicited trades as solicited in customers' accounts.

Yaman Huseyn Sencan, formerly with Mercator Associates, LLC, in Rancho Santa Fe California, was fined $20,000 and barred from association with any FINRA member in any principal capacity and suspended from association with any FINRA member for six months in connection with a finding by FINRA that Sencan failed to reasonably supervise the activities of firm personnel engaged in charging excessive commissions, sharing commissions with a non-member and misusing funds on deposit with the firm.

November 2011

UBS Financial Services Inc., in Weehawken NJ was censured and fined $300,000 in connection with a finding by FINRA that the firm failed to reasonably supervise resulting in a failure to prevent improper, excessive, and unsuitable short-term trading for multiple customer accounts.

John William Grant, formerly with Torrey Pines Securities, Inc., in Red Bluff, California, was barred from association with any FINRA member in connection with a finding by FINRA he executed unauthorized transactions in accounts belonging to trustees of a family trust in excess of $1 million.

Larry Alan Prelesnik, formerly with LPL Financial LLC, in Palm Desert, California, was fined $7,500 and suspended from association with any FINRA member for 20 business days in connection with a finding that Prelesnik sent oversimplified and incomplete solicitations to clients in connection with a 100 percent bond positioning strategy.

Krittibas Ray, formerly with White Pacific Securities, Inc., in San Francisco, California, was barred from association with any FINRA member in connection with a finding by FINRA that after soliciting investors to purchase promissory notes as a vehicle to fund the startup of a hedge fund he used some of the $675,000 in proceeds for personal expenses and proceeds from later sales to pay interest and principal amounts due on the notes earlier purchasers held.

December 2011

Internet Securities and Chief Compliance Officer Michael Wayne Beardsley of Oakland, California, were censured, fined $12,500, and required to retain an outside consultant to review and prepare a report concerning the adequacy of the firm's supervisory, and compliance policies and procedures and supervisory controls in connection with a finding by FINRA that as a result of Beardsley's failure to supervise, the firm's representative was able to conduct numerous unsuitable transactions.

Walter Louis Howerton formerly with Wachovia Securities, LLC, in Modesto, California, was fined $12,500 and suspended from association with any FINRA member for six months in connection with a finding that he made unsuitable recommendations related to a customer's account. The losses on the account forced the customer to closer her position at a substantial loss. FINRA further found that Howerton did not have reasonable grounds to believe that the recommendations were suitable for the customer based on her financial situation and needs.

Fred Ralph Schwartz formerly with Wells Fargo Advisors, LLC, in Los Angeles, California, was fined $5,000 and suspended from association with any FINRA member for three months and was ordered to pay $42,599 restitution to customers in connection with a finding by FINRA that he engaged in excessive, unsuitable trading in the customers' accounts.

Jeffrey Alan Smith with Accelerated Capital Group in Irvine, California, was suspended from association with any FINRA member in any principal capacity for 20 business days in connection with a finding by FINRA that Smith failed to effectively supervise the activities of the firm's associated persons.