Articles Posted in Disciplinary Actions

Financial West Investment Group fined over private placement escrow accounts.

In June 2017, the Financial Industry Regulatory Authority (FINRA) announced that Financial West Investment Group of Westlake, California, submitted an acceptance, waiver and consent letter, or AWC, regarding its participation in private placement offerings without the use of an escrow account. The firm was censured and fined $20,000.

FINRA’s allegations against Financial West Investment Group concerned the firm’s role in collecting and placing private placement securities without the use of an escrow account, which is a violation of industry rules. The AWC stated that the firm did not designate an account to receive the funds, and instead sent checks from the investors directly to the issuer. Such actions violate not only the firm’s Written Supervisory Procedures but also the Securities Exchange Act of 1934.

Coastal Equities fined $15,000.

In June 2017, the Financial Industry Regulatory Authority (FINRA) announced that Coastal Equities Inc. of Wilmington, Delaware, submitted an acceptance, waiver and consent letter, or AWC, regarding its failure to supervise firm sales of non-traditional ETFs, or exchange-traded funds. The firm was censured and fined $15,000.

FINRA’s allegations against Coastal Equities Inc. concerned the firm’s lack of controls and oversight in the sale of multiple types of exchange-traded funds. ETFs are liquid, and are traded like stock on the exchange. Coastal Equities Inc. is supposed to have procedures in place to require that every new product offered and sold is understood by their brokers. According to FINRA, Coastal Equities failed to implement and enforce such written procedures.

Tom Brenner, a registered representative from Orrville, Ohio, formerly with First American Securities, Inc., was barred from FINRA membership as a result of an investigation into his connection to selling private investment offerings. Brenner entered into an acceptance, waiver and consent agreement with FINRA, in which he neither admitted nor denied the findings, and was barred.

In July 2017, Brenner agreed to the suspension and FINRA published its findings that Brenner sold multiple different private placements to his fellow Ohioans. FINRA also found that Brenner misled these customers by telling them they couldn’t contact the private placement sponsors to recover their investments. These sponsors were purported to have private and business relationships with Brenner.

Tom Brenner’s registration and disciplinary history

Roy Woehrman, a registered representative from Oceanside, California, with LPL Financial LLC, was censured and fined by FINRA as a result of an investigation into his sharing of commissions with an unregistered affiliate. Woehrman entered into an acceptance waiver and consent agreement with FINRA, in which he neither admitted nor denied the charges, but agreed to a fine of $12,500.

In July 2017, Woehrman agreed to the suspension and FINRA published its findings that he gave $38,500 in commissions to an unregistered partner who referred customers to Woehrman for investment transactions. These commissions were labeled as advertising funds, but FINRA found that Woehrman misled LPL Financial LLC when he submitted a compliance questionnaire in which he denied engaging in a referral deal.

Roy Woehrman’s registration and disciplinary history

Kim Dee Isaacson, a registered representative from Farmington, Utah, formerly with Ameriprise Financial Services, Inc., was barred from FINRA membership as a result of an investigation into his providing false and misleading information to a customer about his investment account, which is a violation of FINRA rules. Isaacson entered into an acceptance waiver and consent agreement with FINRA, in which he neither admitted nor denied the findings, but was still barred.

In June, 2017 Isaacson agreed to the sanction, and FINRA published its findings that Isaacson lied to a customer multiple times, telling him that his accounts had more money in them than they actually did. FINRA also found that Isaacson misled the customer further, claiming that he sold portions of securities and bonds from his account when he had not. The FINRA claim alleges that Isaacson knew that he was giving his customer misleading information, and never tried to correct himself or to let the customer know.

Kim Dee Isaacson’s registration and disciplinary history

North Carolina broker Jason Likens suspended.

Jason Likens, a registered representative from Asheville, North Carolina, formerly with International Assets Advisory, LLC, was suspended from FINRA membership as a result of an investigation into his borrowing money from customers without obtaining firm approval, which is a violation of LPL and FINRA rules. Likens entered into an acceptance waiver and consent agreement with FINRA in which he neither admitted nor denied the findings but agreed to a suspension of 15 months and a fine of $10,000.

In July 2017, Jason Likens agreed to the suspension and FINRA published its findings that he borrowed $23,500 from a customer, which he did not start paying back until after the agreed upon deadline had passed and multiple petitions were made. FINRA also found that Likens misled International Assets Advisory, LLC when he submitted a compliance questionnaire in which he denied engaging in any loan transactions.

David Gott suspended for outside business activities.

David Gott, a registered representative from Tipton, Iowa, formerly with Ausdal Financial Partners, Inc., was suspended from FINRA membership as a result of an investigation into his selling of private investment equities to customers without obtaining his firm’s approval, which is a violation of FINRA rules. Gott entered into an acceptance waiver and consent agreement with FINRA in which he neither admitted nor denied the findings. He was suspended for six months and fined $5,000.

In July 2017, Gott agreed to the suspension and FINRA published its findings. The report said Gott sold more than $546,000 of private capital to clients and did not notify his firm. FINRA found that Gott’s firm also profited from selling these investments. However, Ausdal Financial Partners, Inc. does not allow their brokers to take part in these types of transactions without their written approval. Gott did not follow the correct guidelines in this process,and compromised his position with the firm.

Craig Langweiler accused of excessive trading.

Craig Langweiler, a registered representative from Philadelphia, Pennsylvania, formerly with Windsor Street Capital, is facing a FINRA complaint as a result of an investigation into a complaint regarding his excessive trading in a customer’s account. FINRA is currently looking into this complaint and has begun a formal investigation.

In July 2017, Craig Langweiler was the focus of a complaint that claimed that he had traded a customer’s account unreasonably.   He allegedly traded 257 times, and lost as much as 25 percent of the customer’s account value. The complaint alleges that Langweiler made over $27,000 from this excessive trading, disregarding the obviously extreme cost cost-to-equity ratio in the account.

Trident Partners hit with fine over complex steepeners trading.

In July, 2017, the Financial Industry Regulatory Authority (“FINRA”) announced that Trident Partners Ltd. of Woodbury, NY, submitted an acceptance, waiver and consent letter regarding its failure to supervise its reps in their selling of steepeners. The firm was censured and fined $50,000.

Steepeners are complex products that entail significant risk.  FINRA has issues several notices to members on steepeners, which are frequently used to “juice” returns on mundane, low risk products like certificates of deposit.

Mercury Securities hit with censure and fine

In July 2017, the Financial Industry Regulatory Authority (“FINRA”) announced that Mercury Securities of San Rafael, CA submitted an acceptance, waiver and consent letter regarding its failure to effectively approve and document private securities transactions made by their representatives. The firm was censured and fined $5,000.

FINRA’s allegations against Mercury Securities concerned the firm’s authorization of private securities transactions made by three of its brokers. They were compensated by outside businesses through these private transactions despite their Written Supervisory Procedures clearly stating that the representatives would need proper approval and written documentation of their outside business dealings. The AWC stated that the firm did not follow the correct protocol and failed to record adequate information about the private deals. It was also discovered that the firm did not record the transactions in their files and allowed the business dealings with their representatives to go unsupervised.