The following information regarding broker misconduct and disciplinary actions taken against California stockbrokers was released by the Financial Industry Regulatory Authority (FINRA) for the period January through March 2012:
Michael William Bozora and Timothy Roberts Redpath, formerly with Capital Solutions Distributors LLC, in Corte Madera, California, were fined $50,000 and suspended from association with any FINRA member in any capacity for two years in relation to findings that as the firm’s principals they failed to conduct adequate initial and/or ongoing due diligence in relation to a private placement offered and sold through their firm. The findings further stated that there was no reasonable basis for believing the offering to be suitable for any of the firm’s customers.
Patricia Collantes was fined $8,000 and suspended from association with any FINRA member in any principal capacity in relation to findings that while acting as Operating Manager at Citigroup Global Markets Inc. in Palo Alto, California, Ms. Collantes failed to supervise an individual resulting in the misappropriation of nearly $750,000 from customers over an eight period. Brandon James Thompson (aka Brandon Lumpkins) was also fined $10,000 and suspended from association with any FINRA member in any capacity for 15 business days in relation to the findings for his role in failing to ensure supervision adequate to prevent the misappropriation.
Mathew Morgan Dooley, formerly with Internet Securities in Oakland, California, was barred from association with any FINRA member in any capacity in relation to a finding that he failed to respond to FINRA requests for information and documents related to recommendations he made to customers. The findings stated that Dooley recommended purchase speculative exchanged-traded funds (ETFs) designed from intra-day trading when he knew customers’ investment objections were growth and income as opposed to speculative day trading.
Bank of America Securities LLC, was censured, fined $12,000 and ordered to pay $6,068.42, plus interest, in restitution to customers in relation to a finding that the firm, in certain transactions for or with a customer, failed to use reasonable diligence resulting in less than favorable transactions to such customers under prevailing market conditions.
Kristopher William Bush, with Merrill Lynch in La Jolla, California, was fined $10,000 and suspended from association with any FINRA member in any capacity for 20 business days in relation to a finding that he conducted impermissible communications with clients. In written communications to clients containing a model fund portfolio comprised of mutual funds approved by his member firm, Bush failed to include: adequate risk disclosures, statements indicating that projections were created with the benefit of back-testing and hindsight, and any indication that Bush was associated with the firm. Some communications indicated that Bush and a partner managed the supposed fund.
Robert John Clark, formerly with Cullum & Burks Securities, Inc., in Carlsbad California, was fined $25,000 and suspended from association with any FINRA member in any capacity for six months in relation to a finding that he sold a private placement to customers totaling $350,000 despite knowing that the entity had missed interest payments in earlier offerings and had received a default notice from a trustee for one of the earlier offerings. Clark failed to conduct adequate due diligence and did not have reasonable grounds to believe the private placement was suitable for any customer.
Sung Hyun Min, formerly with Etech Securities Inc., in Pasadena, California, was fined $5,000 and suspended from association with any FINRA member in any capacity for 30 business days in relation to a finding that he permitted a non-registered person to service his customer accounts resulting in a loss of $60,000 in one of those accounts.
Kim Nazarek, formerly with Questar Capital Corporation, Inc., in Santa Rosa, California, was fined $25,000 and suspended from association with any FINRA member in any capacity for one year in association with findings that he conducted a number of retirement seminars without prior approval that contained false and misleading statements.
Morgan Stanley & Co. LLC of New York, New York, was censured and fined $600,000 in connection with a finding that the firm had sold structured products to customers that did not meet the firm’s own suitability recommendations, and failed to implement procedures to notify supervisors of such sales.
Stone & Youngberg LLC of San Francisco, California, was censured and fined $15,000 in connection with a finding that it created and distributed a brochure about reverse-convertible notes (RECONs) that FINRA determined was not fair and balanced, did not provide a sound basis for evaluating the facts pertaining to RECONs, omitted material facts that caused it to be misleading, and included a statement that was false for most of the time period during which the brochure was used.
Javier Rivera Jimenez, formerly with Wedbush Morgan Securities, Inc., in Los Angeles, California, was fined $14,432 including disgorgement of $6,932 of commissions received and suspended from association with any FINRA member in any capacity for two months in connection with a finding that he effected discretionary transactions in a customer’s account without prior written authorization from the customer and without the firm’s having accepted the account as such.
Melissa Rae Reppert, formerly with Edward Jones in Ventura, California, was fined $25,000 and suspended from association with any FINRA member in any capacity for five months in connection to a finding that she recommended and sold to her firm’s customers shares in an unregistered and not publicly traded company. Reppert’s firm did not participate in the sales nor knew of the transactions, but did have a policy in place prohibiting the practice.