Articles Posted in FINRA Disciplinary Actions

FINRA Case #2014042022401)

Brian Lawrence Stephan (CRD #4222796, Jamestown, Ohio) – Stephan was named a respondent in a FINRA complaint alleging that he recommended and caused the execution of unsuitable investments for an 88-yearold customer.

The complaint alleges that Stephan recommended that the elderly customer invest in mutual fund Class A shares in 20 different mutual fund families. This recommendation was unsuitable because the customer would have been able to achieve a discount on applicable sales charges by aggregating her mutual fund purchases into fewer fund families.

FINRA Case #2014041590801)

John William Cutshall (CRD #874352, Woodsboro, Maryland) – Cutshall was named a respondent in a FINRA complaint alleging that he abused his position as trustee for trusts that he administered on behalf of a married deceased couple and an elderly widow, by converting and improperly using funds from these trusts.

The complaint alleges that in total, Cutshall took approximately $400,000 from the account of the deceased customers’ residuary trust by using his position as trustee to write checks drawn against the trust’s account at his member firm and depositing the checks into his personal bank account. Cutshall did not disclose to his firm that he took these funds.

(FINRA Case #2016049321301)

Terry Lee McCoy (CRD #1476696, New Port Richey, Florida) – An AWC (Accept, Waiver, & Consent) was issued in which McCoy was assessed a deferred fine of $75,000 and barred from association with any FINRA member in any principal capacity.

Without admitting or denying the findings, McCoy consented to the sanctions and to the entry of findings that he failed to appropriately supervise the sales practices of his member firm’s registered representatives.

(FINRA Case #2016050474001)

Donald Lane Preston (CRD #4704220, Powell, Ohio) – An AWC (Accept, Waiver & Consent) was issued in which Preston was assessed a deferred fine of $10,000, suspended from association with any FINRA member in all capacities for six months, ordered to pay $3,515.51, plus interest, in deferred restitution of fees to a customer and ordered to pay $1,427.39, plus interest, in deferred disgorgement of commissions received.

Without admitting or denying the findings, Preston consented to the sanctions and to the entry of findings that he recommended variable annuity exchanges and a mutual fund investment to a customer without having a reasonable basis to believe that the proposed investments were suitable.

(FINRA Case #2016051493702)

Harold Lee Connell (CRD #1482623, Pinecrest, Florida) – An AWC (Accept, Waiver, and Consent) was issued in which Connell was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Connell consented to the sanction and to the entry of findings that he willfully violated Section 10(b) of the Exchange Act and Rule 10b-5, and FINRA Rules 2010 and 2020 by participating in the sale of three unregistered Regulation D offerings through misrepresentations and omissions.

The findings stated that Connell and others at his member firm raised over $4.5 million from individual investors in connection with the sale of the three unregistered Regulation D offerings. The private placement memorandums (PPMs) for the three offerings provided that investors’ funds would be used to make investments in a variety of companies. However, the first offering was invested 85 percent in one penny stock company. The other two offerings were primarily undisclosed self-offerings.

(FINRA Case #2015046971701)

 Nas Adel Allan (CRD #4562149, Staten Island, New York) – An Offer of Settlement was issued in which Allan was fined $2,500, suspended from association with any FINRA member in all capacities for one month and ordered to pay disgorgement of a portion of commissions received in the amount of $2,500, plus interest.

Without admitting or denying the allegations, Allan consented to the sanctions and to the entry of findings that he recommended, over an approximate two month period, that elderly husband and wife customers engage in short-term trading of a single security that they had held for over 36 years, resulting in losses and capital gains tax liability for the customers and generating over $22,000 in commissions, markups and markdowns for Allan.

(FINRA Case #2016051931501)

Michael Terry Swingle (CRD #723350, Dunedin, Florida) – An AWC (Accept, Waiver & Consent) was issued in which Swingle was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for 18 months.

Without admitting or denying the findings, Swingle consented to the sanctions and to the entry of findings that as a result of deteriorating financial circumstances caused in part by gambling, he borrowed a total of $118,500 from five customers of his member firm, contrary to the firm’s policy.

(FINRA Case #2015046971701)

Gregory J. Anastos (CRD #5800831, Jersey City, New Jersey)  – An Offer of Settlement was issued in which Anastos was suspended from association with any FINRA member in all capacities for four months. In light of Anastos’ financial status, no monetary sanction has been imposed.

Without admitting or denying the allegations, Anastos consented to the sanction and to the entry of findings that he recommended, over an approximate 13-month period, that elderly husband and wife customers engage in short-term trading of a single security, resulting in significant losses for them and generating over $78,158 in commissions, markups and markdowns for himself.

(FINRA Case #2016049239101)

Richard Charles Foster (CRD #4557045, Tulsa, Oklahoma) – An AWC (Accept, Waiver & Consent) was issued in which Foster was assessed a deferred fine of $10,000 and suspended from association with any FINRA member firm in all capacities for six months.

Without admitting or denying the findings, Foster consented to the sanctions and to the entry of findings that he made an unsuitable recommendation that a customer liquidate an individual retirement account (IRA) and give Foster the proceeds to trade in an outside brokerage account utilizing a risky and costly options trading strategy.

(FINRA Case #2016050492101)

Walter Warren Parker (CRD #2131232, Wylie, Texas)  – An AWC (Accept, Waiver & Consent) was issued in which Parker was fined $7,500 and suspended from association with any FINRA member in all capacities for one month.

Without admitting or denying the findings, Parker consented to the sanctions and to the entry of findings that he made investment recommendations to a customer that were not suitable given her age, risk tolerance, financial experience and liquidity.