California Stockbroker Discipline Report for May 2010

Thumbnail image for warning_flag.jpgThe following information regarding broker misconduct and disciplinary activities taken against California stockbrokers was released by the Financial Industry Regulatory Authority (FINRA) in May 2010:

Mission Securities Corporation of San Diego, California, was expelled from FINRA membership and the firm’s principal Craig Michael Biddick was barred from association with any FINRA member in any capacity. The firm and Mr. Biddick were also ordered to pay $38,946.06, plus interest, to customers, for converting and misusing securities held in customer accounts to pay firm operating expenses.

Wedbush Morgan Securities Inc. of Los Angeles, California was censured and fined $12,500 and required to make restitution to customers totaling $5,986.26 for allegedly selling municipal securities to customers from its own account at unfair and unreasonable prices.

Martin David Batstone with Independent Financial Group in San Diego, California, and formerly with QA3 Financial Corporation was fined $5,000 and suspended from association with any FINRA member in any capacity for 10 business days for allegedly participating in the sale of equity indexed annuities when his employing brokerage firm did not have a selling agreement with the issuing companies.

Jason Allen Groth with Independent Financial Group in San Diego, California, and formerly with QA3 Financial Corporation was fined $5,000 and suspended from association with any FINRA member in any capacity for 90 business days for allegedly participating in the sale of equity indexed annuities when his employing brokerage firm did not have a selling agreement with the issuing companies. Mr. Groth consented to the described sanctions and to the entry of findings that he failed to disclose to his employing firm that he sold equity-indexed annuities with a face-value of $4,800,000 for which he earned approximately $524,142 in commissions.

Reed Theodore Johnson with CUSO Financial Services in San Diego, California, was fined $7,500 and suspended from association with any FINRA member in any principal capacity for 10 business days for allegedly approving the unsuitable sale of securities by a broker under his supervision.

Harold (“Hal”) Sheldon Minsky with J.H. Darbie & Co., Inc.–recently with Strasbourger Pearson Tulcin Wolff Incorporated; Peak Securities Corporation; and also National Securities Corporation–was fined $10,000 and suspended from association with any FINRA member in any capacity for 30 days for allegedly selling unregistered stock that was not exempt from registration resulting in net proceeds of $6 million that was wired to offshore accounts.