In July, 2017, a FINRA arbitrator panel sitting in New York, NY issued a $2.6 million binding arbitration award against Northeast Securities a FINRA registered broker dealer.  The award was joint and several against Northeast Securities and registered reps Stephen Perrone, Diane Hawkins and Jonathan Zucker. The award includes nearly $900,000 in pre award interest and reimbursement for close to $34,000 in expert witness costs.  Perrone, Hawkins and Zucker’s requests to expunge the claim from the CRD system was denied by the panel.

The underlying matter involved corporate bonds, and Claimant asserted claims for breach of fiduciary duty, negligence, churning, misrepresentations and violations of FINRA rules. During the pendency of the case, the Claimant filed a request with the panel to make a disciplinary referral to FINRA for Respondents alleged refusal to turn over presumptively discoverable telephone records that could have aided Claimant’s case.  The panel denied the request to make the disciplinary referral.

Improbably, despite making such a large award on behalf of the Claimant, the panel split the arbitration hearing session fees 50-50, requiring Claimant to pay $13,500 to FINRA.

In July, 2017, a FINRA arbitrator panel sitting in Los Angeles, CA issued a $1,797,100 binding arbitration award against Wedbush Securities a FINRA registered broker dealer.  The award included nearly $1.2 million in punitive damages pursuant to the California Elder Abuse and Dependent Adult Act.  The panel also added nearly $300,000 in attorney’s fees.

The underlying matter involved structured products and steepeners, synthetic securities that allow speculators to bet on the direction of interest rates.  The panel also made an affirmative finding that Wedbush Securities  and broker Mark Augusta engaged in unauthorized trading in the Claimant’s account.  Among the securities at issue were Citigroup FDG Medium Term, Lloyds TSB Bank Steepner Note, SG Structured Prods Medium Term and Citibank NA Principal Protected MLCD Quarterly Notes

After a seven day arbitration hearing over March and May, 2017, the arbitrators rendered their decision, and awarded the Claimant $250,000 in compensatory damages, with the remainder being commission disgorgement, punitive damages, attorney’s fees and costs. The panel found Wedbush solely liable, based on Wedbush’s  obligation to indemnify Mark Augusta, and no portion of the award is owed by Augusta.  The panel, nevertheless found that both Wedbush Securities and Mark Augusta engaged in “improper conduct.” Augusta left Wedbush in May, 2015 after four years with the firm.  He is now registered with Hilltop Securities in Del Mar, California.

Former Orem, Utah broker Clark Gardner has been barred by FINRA and the SEC

In June, 2016 the SEC announced a bar against former Sammons Securities and Cetera Advisors broker Clark Gardner.  This followed on the heels of a bar issued by FINRA in 2014.  The FINRA bar related to Gardner’s outside business activities, and sales of unregistered securities.  That year, in May, 2014 Gardner was discharged by Cetera Advisors with allegations pending that he failed to disclose his outside business activities and sold unapproved products.

Gardner, of Orem Utah consented to the entry of findings against him in the SEC action.  The SEC proceeding was filed shortly after Gardner plead guilty to securities fraud in Utah District Court, and was sentenced to between one and fifteen years in prison, with the sentence suspended by the court.

Vincent Mehdizadeh agrees to a ban, and a $12 million fine to settle SEC charges related to Medbox.

In March, 2017 entrepreneur Vincent Mehdizadeh agreed to settle charges brought by the SEC against him and his company Medbox, a legal Marijuana consulting company (now known as Notis Global- ticker symbol NGBL).

According to the complaint filed by the SEC, Mehdizadeh mistated Medbox’s revenues and used sham transactions to give the appearance that the company was profitable.  According to the complaint 90% of Medbox’s revenues came from transactions in a company created by Mehdizadeh, and not from legitimate business generated by Medbox. Instead of record revenue, as was claimed, Medbox used a shell company formed by Mehdizadeh to sell company stock, then claimed the proceeds as revenue for Medbox.

In May, 2017, a FINRA arbitrator panel sitting in Los Angeles issued a $1,378,800 binding arbitration award against Charles Laverty in a case involving personal loans that the clients made to Laverty.

The underlying matter involved allegations that Charles Laverty breached his fiduciary duty by soliciting a loan in violation of firm and industry rules.  Allegations were also raised concerning the mismanagement of the account.  Among the claims made were those for fraud, violations of state and federal securities laws and violations of FINRA’s rules.

After a twelve day arbitration hearing stretching from June, 2016 to April, 2017, the arbitrators rendered their decision and awarded the Claimant $1,378,800 in damages.

LPL Financial hit with $160,000 FINRA arbitration award.

In June, 2017, a FINRA arbitrator panel sitting in San Francisco issued a $160,000 binding arbitration award against LPL Financial in a case involving VIX derivative securities.

The VIX is a measure of the expected volatility in the stock market, specifically the S&P 500.  The VIX serves as a barometer of investor sentiment, and it is used as a tool to hedge against market volatility.  Among the ways to benefit from the rise and fall of the VIX index is buy purchasing or selling VIX option and futures. This can also be done via fund shares or exchange traded notes.

Bob Simons suspended over discretionary trading

In June, 2016 FINRA suspended International Assets Advisory broker Bob Simons for 45 days and fined him $5,000 over allegations that Simons used a private email account to conduct firm business and exercised  discretion in customer accounts without complying with firm protocol for doing so. Simons consented to the findings without admitting or denying them, and agreed to the suspension and fine.

Simons, of Brooklyn, Connecticut was affiliated with International Assets Advisory from October, 2014 to May, 2016.  Prior to that he was affiliated with Center Street Securities from September, 2011 to August, 2014.  Before that he was with NY Life Securities.

Todd Pilosi, a registered representative from Clovis, California, formerly with LPL Financial was suspended from FINRA membership as a result of an investigation into his borrowing money from a customer without obtaining firm approval, which is a violation of LPL and FINRA rules.   Pilosi 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 four months and a fine of $5,000.

In June, 2017 Todd Pilosi agreed to the suspension and FINRA published its findings that Pilosi borrowed $150,000 from a customer, which has not been paid back.  Pilosi has entered into a settlement agreement with the customer.  FIRNA also found that Pilosi misled LPL when he submitted a compliance questionnaire in which he denied engaging in the loan transaction with the customer.

Todd Pilosi’s registration and disciplinary history

John Olinghouse, a registered representative from Sparks, Nevada, formerly with HD Vest and Fortune Financial Services was suspended from FINRA membership as a result of an investigation into his reusing customer signatures by affixing them to different documents.  Olinghouse 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 one year and a fine of $15,000.

In June, 2017 John Olinghouse agreed to the suspension and FINRA published its findings that Olinghouse used whiteout  and cutouts of client signatures on broker dealer documents and settled a customer complaint without notifying the firm.

John Olinghouse’s registration and disciplinary history