Articles Posted in FINRA Disciplinary Actions

(FINRA Case #2016051945101)

Thomas H. Lawrence III (CRD #1839619, Chapel Hill, Tennessee) – Lawrence was named a respondent in a FINRA complaint alleging that he borrowed more than $39,000 from one of his securities customers, a retiree who was approximately 96 years old.

The findings stated that Lawrence promised to repay the loan in a year, but he never repaid any part of it.

(FINRA Case #2016049871601)

Jason Hunter Likens (CRD #4716661, Asheville, North Carolina) – An AWC (Accept, Waiver & Consent) was issued in which Likens was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for 15 months.

Without admitting or denying the findings, Likens consented to the sanctions and to the entry of findings that he borrowed $23,500 from two customers without disclosing the loans to his member firm or receiving its approval to borrow from the customers.

(FINRA Case #2013035817702)

Daniel Joseph Hushek III (CRD #4250117, Bradenton, Florida) – An AWC (Accept, Waiver & Consent) was issued in which Hushek was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in any principal capacity for 15 months.

Without admitting or denying the findings, Hushek consented to the sanctions and to the entry of findings that he failed to adequately supervise the sales practice of a registered representative who recommended and engaged in unsuitable trading of non-traditional exchange-traded funds (ETFs).

(FINRA Case #2014040295201)

Carolina Financial Securities, LLC (CRD® #41970, Brevard, North Carolina) and Bruce Victor Roberts (CRD #1489110, Brevard, North Carolina) – An Office of Hearing Officers (OHO) decision became final in which the firm was fined $60,000 and the firm and Roberts were each served with a Letter of Caution.

The sanctions were based on findings that the firm made material misrepresentations and omissions in connection with the sale of securities. The findings stated that the firm recommended a funding entity’s senior secured notes to investors without conducting an investigation that was sufficient to provide a reasonable basis for determining that the notes were suitable for any investor.

(FINRA Case #2016049353501)

 Geraldine Gordon (CRD #2499098, Lexington, Kentucky) – An AWC (Accept, Waiver & Consent) was issued in which Gordon was fined $7,500 and suspended from association with any FINRA member in all capacities for 10 business days.

Without admitting or denying the findings, Gordon consented to the sanctions and to the entry of findings that she recommended that her customer liquidate several diversified investments in her member firm brokerage and IRA accounts, and invest half of her liquid net worth in a single Master Limited Partnership focused on the energy sector.

(FINRA Case #2016048456401)

Larry Charles Wolfe (CRD #502361, Boca Raton, Florida)  – An AWC (Accept, Waiver & Consent) was issued in which Wolfe was fined $5,000 and suspended from association with any FINRA member in all capacities for 15 business days.

Without admitting or denying the findings, Wolfe consented to the sanctions and to the entry of findings that he exercised discretion in customer accounts by submitting sell orders to sell one particular security in each customer account without obtaining the customers’ prior written authorization to exercise discretion in their accounts and having his member firm’s approval of the customer accounts for discretionary trading.

(FINRA Case #2014039420301)

 Trustfirst Inc. (CRD #39057, Knoxville, Tennessee) – An AWC (Accept, Waiver & Consent) was issued in which the firm was censured and fined $15,000.

Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it distributed offering documents in connection with the sale of three unregistered offerings that contained typographical errors and were internally contradictory regarding the nature of the offerings’ contingency terms and possible extensions of the contingency termination date.

(FINRA Case #2012030422902)

Legend Securities, Inc. (CRD #44952, New York, New York)  – An OHO (Office of Hearing Officers) Decision became final in which the firm was fined a total of $475,000 and ordered to pay $884,436.24, plus interest, in restitution to customers. The sanctions were based on findings that the firm failed to have a reasonable supervisory system and WSPs (Written Supervisory Policies) to ensure it timely reported customer complaints, filed timely amendments to Uniform Application for Securities Industry Registration or Transfer (Form U4) and Uniform Termination Notice for Securities Industry Registration (Form U5), reviewed incoming and outgoing email communications, and considered heightened supervision for brokers with histories of misconduct.

The findings stated that the firm failed to report, or reported late, customer complaints to FINRA, and failed to file and timely file amendments to Forms U4 for seven of its registered representatives. The findings also stated that the firm improperly charged customers in 34,313 securities transactions. The confirmations sent to customers described the charges as “handling fees,” which was misleading and inaccurate. As a result, the firm willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-10.

(FINRA Case #2013038869101)

Oppenheimer & Co. Inc. (CRD #249, New York, New York) – An AWC (Accept, Waiver & Consent) was issued in which the firm was censured, fined $20,000, and ordered to pay $10,301.44, plus interest, in restitution to customers.

Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that, in six transactions, it purchased municipal securities for its own account from a customer and/or sold municipal securities for its own account to a customer at an aggregate price (including any mark-up or mark-down) that was not fair and reasonable, taking into consideration all relevant factors, including the best judgment of the broker, dealer or municipal securities dealer as to the fair market value of the securities at the time of the transaction and of any securities exchanged or traded in connection with the transaction; the expense involved in effecting the transaction; the fact that the broker, dealer, or municipal securities dealer is entitled to a profit; and the total dollar amount of the transaction.

(FINRA Case #2014040644001)

James William Flower (CRD #2817701, Melville, New York)  – An AWC (Accept, Waiver & Consent) was issued in which Flower was suspended from association with any FINRA member in all capacities for three months and required, within 60 days of the date of the Notice of Acceptance of the AWC, to attend and satisfactorily complete 10 hours of continuing education concerning complex products, which includes exchange-traded notes, by a provider not unacceptable to FINRA. Within 30 days of following completion of such training, Flower will submit written proof that the continuing education program has been satisfactorily completed. In light of Flower’s financial status, no monetary sanction has been imposed.

Without admitting or denying the findings, Flower consented to the sanctions and to the entry of findings that he recommended that 13 of his customers invest in a highly volatile exchange-traded note without having a reasonable basis for recommending the transactions.