Securities Fraud Lawyer Blog

Jason Sayles suspended 10 months.

In March, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Jason Sayles of St. Petersburg, FL, formerly with Cetera Financial of St. Petersburg, FL was suspended from association with any FINRA member in any capacity for ten months and fined $15,000.  The suspension and fine arise out of FINRA’s investigation into Sayles’ outside CPA business, and his practice of helping clients establish self-directed individual retirement account to purchase investments.  Sayles played a role in helping transfer nearly $2,000,000 in client funds from his member firm to an outside third party self-directed IRA custodian where the clients purchased unregistered securities.  Sayles was required to notify his firm of these activities in writing, but he failed to do so.

Registration and disciplinary history

Michael Hajek suspended by FINRA

In March, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Michael Hajek of Treasure Island, FL, formerly with Cetera Financial of St. Petersburgh, FL was suspended from association with any FINRA member in any capacity for eighteen months and fined $35,000.  The suspension and fine arise out of FINRA’s investigation into Hajek’s outside business activities, specifically his role in assisting clients in opening self-directed IRAs to purchase promissory notes and membership interests in private securities transactions.  Hajek’s involvement lead directly to over two million dollars in purchases. According to the findings, after learning of Hajek’s outside business activities, Cetera asked Hajek to stop, but he failed to do so, and failed to disclose his participation and activities related to the outside IRA transactions.

Registration and disciplinary history

Peter Dourdas barred.

In March, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Peter Dourdas of Jamesville, NY, formerly with Questar Capital of Syracuse, NY was barred from association with any FINRA member in any capacity as a result of his failure to provide FINRA information regarding their investigation into his outside business activities.  According to the findings Dourdas made material misrepresentations to Questar during the firm’s annual supervisory reviews regarding Dourdas’ outside business activities.

Registration and disciplinary history

Penates Group fined.

In March, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Penates Group of Phoenix, Arizona submitted an acceptance, waiver and consent letter regarding its failure to effectively implement an anti-money laundering compliance program into its securities business. In agreeing to the AWC, the firm was fined $17,500.

FINRA’s allegations against Penates Group concerned its participation in the sale of two private placement securities offerings. FINRA found that the firm did not verify information for customers who participated in the offerings, did not retain business related emails for the representative who sold the offerings, and failed to require documentary evidence be completed and reviewed prior to the time that customers participated in the offerings.

Fulcrum Securities fined.

In March, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Fulcrum Securities of St. Louis, Missouri submitted an acceptance, waiver and consent letter regarding supervisory lapses in its securities business. In agreeing to the AWC, the firm was fined $20,000.

FINRA’s allegations against Fulcrum Securities included that the firm failed to properly implement and maintain a supervisory system designed to detect and act on red flags in its micro-cap (penny stock) business.  FINRA found that the firm did not act on potentially suspicious activity relating to foreign owned accounts as required under the anti-money laundering rules and procedures.  The firm also did not properly implement their written supervisory procedures as they related to the sale of unregistered securities, which allowed large sales of penny stocks.

Curtis Worrell suspended over DLG sales

In May, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Curtis Worrell of Roanoke, VA, formerly with Financial West Group was suspended from association with any FINRA member in any capacity for one year and fined $44,000 as a result of his participation in a private securities transaction.  According to the findings Worrell sold over one million dollars of securities without obtaining the permission of his firm, and received over $46,000 in commissions. The transactions relate to Diversified Lending Group, a real estate ponzi scheme that collapsed in 2009.

Registration and disciplinary history

Charles McInnis suspended 18 months

In May, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Charles McInnis of Miami, Florida, formerly with CP Capital Securities of Miami, FL was suspended from association with any FINRA member for eighteen months as a result of his participation in an unregistered securities offering by a Columbian energy company.  As the designated supervisor overseeing the offering, including the completion of due diligence on the offering, FINRA alleged that McInnis failed to ensure the firm’s offering paperwork was complete and designed to ensure compliance with the securities laws.  As a result, CP Capital Securities did not collect and maintain sufficient documentary information on the five million dollar unregistered securities offering.

Registration and disciplinary history

Gerard Fagnant barred by FINRA

In May, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Gerard Fagnant of Westminster, MA, formerly with LPL Financial Services, of Leominster, MA was barred from association with any FINRA member as a result of his participation in undisclosed loan transactions with an LPL customer.  According to the findings, Fagnant borrowed over $300,000 from a customer and deposited the funds into an account away from LPL.  He promised to repay the customer by way of a promissory note, but shortly after making the note, he stopped paying interest and the note went into default.  As of the time of the FINRA regulatory investigation the loan remained outstanding.

Registration and disciplinary history

Frank Capuano suspended by FINRA

In May, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Frank Capuano of West Springfield, MA, formerly with Royal Alliance Associates, of Holyoke, MA was suspended from association with any FINRA member for twelve months and fined $10,000 as a result of his participation in a private offering of “note” securities of the Woodbridge Mortgage Investment Fund.  FINRA’s investigation centered on Capuano’s role in Woodbridge Mortgage Investment Fund’s sale of securities.  According to the findings, Capuano sold over $1,000,000 of the private notes to Royal Alliance customers and received over $30,000 in commissions.  Capuano did not seek or obtain permission from Royal Alliance prior to offering the Woodbridge Mortgage Investment Fund notes to his customers., which is a violation of FINRA rules.

Registration and disciplinary history

Jeffrey Borneman suspended

In May, 2016, the Financial Industry Regulatory Authority (“FINRA”) announced that Jeffrey Borneman of Los Angeles, CA, formerly with World Equity Group, Cambridge Investment Research and Concorde Investment Services, all of Los Angeles, was suspended from association with any FINRA member for thirty days and fined $5,000 as a result of his participation in a private offering of securities. FINRA’s investigation centered on the sale of shares in Borneman’s own LLC to a customer without his providing notice to his firm or obtaining the firm’s permission.

Registration and disciplinary history