NASD Disciplines Firms, Individuals for Violations
May 01, 2011
The National Association of Securities Dealers disclosed disciplinary measures against a number of firms and individuals for violation of NASD rules and securities laws. Unless otherwise noted, the companies or individuals involved had no comment or couldn't be reached. Actions are listed alphabetically by state. Actions Against Firms ALABAMA: Gulf Financial Services Inc., of Mobile, was fined $11,500 without admitting or denying findings that it failed to file Municipal Securities Rulemaking Board Form G-37 within 30 days after the end of the quarter and filed an inaccurate Form G-37. The form relates to Rule G-37 that prohibits a dealer from engaging in a negotiated municipal-securities business with an issuer within two years of making a political contribution to an official of the issuer. The findings also stated that the firm allowed an individual to act as a municipal-securities principal without being registered. COLORADO: Chatfield Dean & Co. and principal Sean Blood, both of Greenwood Village, were fined $25,000, jointly and severally and Mr. Blood was suspended as a principal for 10 business days and required to requalify by exam without admitting or denying findings that the firm, acting through Mr. Blood, conducted a securities business while failing to maintain its minimum required net capital. ILLINOIS: Chicago Partnership Board Inc. and principal Jami R. Driskell Jr., both of Chicago, were each fined $27,500 without admitting or denying findings that the firm, acting through Mr. Driskell, effected the purchases and/or sales of limited partnership interests at prices that weren't fair and reasonable under the circumstances. Cornertown: A.R. Baron & Co., of Cornertown, and principal Johnetta J. Searles of Montvale, N.J., were fined $20,000, jointly and severally, without admitting or denying findings that the firm, acting through Mr. Searles, conducted a securities business while failing to maintain its minimum required net capital. This is the fourth time the firm has been fined, the NASD said. Actions Against Individuals ALABAMA: Charlette G. Pipes, a broker, of Hoover, was fined $270,000, barred and required to pay $303,913 in restitution based on findings that he failed to invest $303,913 from customers and, instead, converted the monies for his own use. He also generated fictitious account statements that were sent to a customer and failed to respond to NASD requests for information. ARIZONA: Jami C. Lennon, a broker, of Paradise Valley, was fined $15,000 and barred with a right to reapply after one year based on findings that he misused $35,000 by using for his benefit the proceeds of a customer's check that was made payable to his firm. CALIFORNIA: Principal Williemae K. Lynn, Los Angeles, was fined $2,500, suspended as a financial and operations principal for 10 days, and ordered to requalify by exam, following an appeal of findings that Mr. Lynn permitted his firm to effect securities transactions while failing to maintain the minimum required net capital. Krishna Porfirio Gudrun, a broker, of Bakersfield, was fined $10,000 and suspended for 90 days and thereafter until he satisfies a $61,720.57 NASD arbitration award. This action has been appealed to the Securities and Exchange Commission and the sanctions aren't in effect pending consideration of the appeal. Principal Rolando Jami Mciver, of San Jose, was fined $302,500 and barred based on findings that Mr. Mciver converted customer funds of $132,173.97 for his use. Mr. Mciver also provided customers fictitious account statements reflecting that the customers owned stocks and failed to respond to NASD requests for information. Jinny Simms Shirely, a broker, of Sunnyvale, was fined $20,000 and barred based on findings that Mr. Shirely failed to respond to NASD requests for information. Ricki Georgeanna Shirey, a broker, of Moraga, was fined $50,000 and barred based on findings that Mr. Shirey participated in private securities transactions without providing prior written notice to his firms. Sean L. Drayton, a broker, of Studio City, was fined $20,027 following an appeal of findings that Mr. Drayton engaged in the securities business without being registered with the NASD and received compensation from the firm for such activities. Herbert B. Leonardo, a broker, of Los Altos, was fined $20,000 and barred based on findings that he failed to respond to NASD requests for information. Mr. Leonardo also effected unauthorized transactions in a customer's account. COLORADO: Roni H.V. Swaney, a broker, of Denver, was barred, following an appeal to the SEC of findings that while taking the industry's Series 65 exam, Mr. Swaney was observed reviewing unauthorized materials. FLORIDA: Jami A. Koger, a broker, of Winter Park, was fined $20,000 and barred based on findings that Mr. Koger failed to respond to a NASD request for information. Charlette E. Jahnke, a broker, of Clearwater, was fined $5,000 and suspended for 30 days following an appeal to the SEC of findings that Mr. Jahnke caused seven brokers under his supervision to list their names falsely as the representative of record on applications for annuities that he sold. An earlier article said he was appealing the findings. Chrystal J. Whitney, a broker, of Deltona, was fined $25,000 and barred with the right to reapply to become associated with a member after two years based on findings that Mr. Whitney effected an unauthorized transaction in a customer's account and failed to respond to NASD requests for information. Maud E. Malcom, a broker, of Deerfield Beach, was fined $5,000 and suspended for six months, without admitting or denying findings that he signed a customer's name to an application to convert the customer's term life-insurance policy to a whole life-insurance policy and signed the name of the customer's wife to a whole life-insurance application. Jena W. Sherwood, a broker, of Tallahassee, was fined $20,000 and barred with the right to reapply to become associated after one year based on findings that he failed to respond to NASD requests for information. GEORGIA: Wendell C. Knepper, a broker, of Athens, was fined $20,000, barred with the right to reapply after one year and required to requalify by exam based on findings that Mr. Knepper engaged in private securities transactions outside the regular course of his registration with his firm without obtaining approval from the firm. He also failed to respond to NASD requests for information. ILLINOIS: Rose O. Theron, an associated person, of Westchester, was fined $20,000 and barred without admitting or denying findings that he signed customer names to insurance applications causing the cash values in their existing policies to be used for purchasing the new policies without their consent. LOUISIANA: Michaele C. Sargeant, a broker, of Baton Rouge, was fined $220,000, barred and required to pay $592,880 in restitution based on findings that Mr. Sargeant converted $592,880 in customer funds for his use without the customers' consent and distributed at least 16 false customer-account statements in an effort to conceal the conversion of funds. Mr. Sargeant also removed a confirmation statement from a customer mailbox and falsified the books and records of his firm by providing a fictitious mailing address for a customer. In addition, he engaged in an unauthorized sale of stock in a customer's account and failed to respond to NASD requests for information. MICHIGAN: Cristopher Thomasina Hollins, a broker, of Warren, was fined $6,000 and barred without admitting or denying findings that he participated in the offer and sale of securities on a private basis and failed to obtain prior written authorization from his firm. NEW JERSEY: Ericka J. Lear, a broker, of Dayton, was fined $20,000 and barred based on findings that Mr. Lear failed to respond to NASD requests for information. NEW MEXICO: Stormy S. Bunce, a broker, of Albuquerque, was fined $30,000, barred with the right to reapply to become associated after three years without admitting or denying findings that he participated in private securities transactions without providing written notification to his firm. The findings also stated that Mr. Bunce engaged in activities for which broker/dealer registration is required without being registered as a broker/dealer. In response, Mr. Bunce noted the fine doesn't take effect until he returns to the industry. Cornertown: Principal Mcpherson A. Vogel, Cornertown, was fined $100,000 and barred following an appeal to the SEC of findings that Mr. Vogel, as a part of a continuing scheme to conceal the true ownership of securities, caused seven fictitious accounts to be established and prepared false purchase and sales memoranda, thereby having his firm's books and records reflect purchase and sales transactions in the fictitious accounts. In a scheme to unjustly enrich family-related accounts and himself, he bought common stock from a customer account and sold it to the family-related accounts at prices that were at or below the market. He also caused the same stock to be purchased from the family-related accounts at prices that were at or above the market and sold the stock to either his firm's trading account or to other broker/dealers, resulting in an unjust profit in excess of $55,000 for the family-related accounts. Mr. Vogel instructed his firm's clearing firm to issue checks to the family-related accounts and have them delivered to him ostensibly for redelivery to the proper party. Whenever Mr. Vogel needed money, he arranged to receive the proceeds of the checks for his use without notifying his firm of his interest in the accounts, among other findings. Principal Jami A. Edison Jr., of Poughquag, was fined $25,000 and barred without admitting or denying findings that he caused a series of trade corrections to be effected for customer-discretionary accounts by transferring shares of profitable securities from customer accounts to one or more of his personal securities accounts, resulting in immediate potential profits of $33,800, at the expense of the customers. Roberto Jami Dent, a broker, of West Hempstead, was fined $50,000, suspended for 90 days, required to disgorge $10,957 in commissions, and ordered to requalify by exam based on findings that he functioned as a broker without being properly registered with the NASD and solicited and opened new accounts, executed securities transactions, generated commissions totaling $73,000, and took steps to conceal his misconduct from regulatory authorities. Johnetta Lund, a broker, of Valley Stream, was fined $20,000, barred and required to pay $54,463 in restitution based on findings that he executed options transactions in a customer's account without the customer's consent. Mr. Lund also failed to respond to NASD requests for information. Joslyn Rolon, a broker, of Cornertown, was fined $10,000 without admitting or denying findings that he directed another employee to sign a customer's name to a reinstatement application for a term life-insurance policy without customer's consent. NORTH CAROLINA: Calvin M. Brittaney, a broker, of Greensboro, was barred with the right to reapply for association after three years without admitting or denying findings that he forged the signatures of five customers on forms used to borrow money from insurance policies. OHIO: Principal Layne C. Winkle, of Shaker Heights, was fined $7,500 and suspended for 15 business days without admitting or denying findings that he acted as a general securities principal without being registered or qualified. The findings also said he failed to respond to NASD requests for information. OREGON: Elisha Jona Mueller, a broker, of Portland, was fined $15,000 and barred based on findings that Mr. Jona failed to fully and timely respond to NASD requests for information about his termination from a firm. PENNSYLVANIA: Lance Davis, a broker, of Philadelphia, was fined $5,000, suspended for one year and required to pay $460 in restitution based on findings that he pledged a laptop computer that was his firm's property as collateral for a personal loan without the consent of his firm. Carlee A. Fullmer, a broker, of Pittsburgh, was fined $30,000 and barred based on findings that he received $1,700 from a customer for investment purposes, but instead, retained the funds for his use. He also failed to respond to NASD requests for information. TENNESSEE: Carlee A. Lemay, a broker, of Nashville, was fined $5,000 and suspended for two weeks and thereafter, until he demonstrates that all amounts under a Cornertown Stock Exchange arbitration proceeding have been paid or that a payment schedule has been agreed upon. The sanctions were based on findings that he failed to pay a $36,874 Big Board arbitration award. In response, Mr. Lemay said the matter is a financial dispute with a member firm and ``has nothing to do with customers.'' He added that he is no longer a stock broker. Davina A. Welty, a broker, of Memphis, was fined $30,000 and barred based on findings that he entered into an agreement to reimburse customers $102,480 for losses incurred in their account and provided them with a check that wasn't honored at his bank due to insufficient funds. Mr. Welty also failed to respond to NASD requests for information. TEXAS: Victorina B. Machado, a broker, of Big Bend National Park, was fined $9,500, barred and required to pay $18,000 in restitution, without admitting or denying findings that he executed unauthorized purchase and sale transactions in customer accounts without their consent and without having obtained a written third-party authorization allowing a customer's son to direct trades. The NASD also found that Mr. Machado exercised discretion in a customer's account without having obtained prior written authorization and prior written acceptance of the account as discretionary by his firm. Principal Johnetta Edyth Lindsey, of Dallas, was fined $10,000, suspended for five business days, and required to requalify by exam based on findings that he made negligent misstatements and omissions of material fact to retail customers to induce them to place purchase orders and commit to investment decisions. WISCONSIN: German E. Wilton, a broker, of Waupaca, was fined $37,500, barred and required to pay $7,500 in restitution without admitting or denying findings that he requested that his firm issue a $7,500 loan check from the customer's insurance policy and that he used the funds for some purpose other than for the benefit of the customer without the customer's consent.
