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(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.

(FINRA Case #2011026346206)

Jaoshiang Luo (CRD #2143876, Flushing, New York) was barred from association with any FINRA member in any capacity and ordered to pay $109,769.88, plus prejudgment interest, in restitution to customers. The NAC (National Adjudicatory Council) modified the sanctions following appeal of an OHO (Office of Hearing Officers) decision. The sanctions were based on findings that Luo made material misrepresentations and omissions in connection with the sale of high interest rate promissory notes issued by his member firm’s parent company.

The findings stated that Luo sold the high interest rate promissory notes to two unsophisticated investors with conservative risk tolerances and investment objectives without a reasonable basis for determining that the notes were suitable for any investor or for these specific investors.

(FINRA Case #2013036799501)

J. Michael Casas (CRD #4422064, San Antonio, Texas) was barred from association with any FINRA member in any capacity and ordered to pay $50,000, plus prejudgment interest, in restitution to an investor. The National Adjudicatory Council imposed the sanctions following an appeal of an Office of Hearing Officers decision. The sanctions were based on findings that Casas converted investors’ funds and fraudulently sold securities issued by a company he owned and controlled on the basis of false statements of material fact regarding the use of investor funds.

The findings stated that Casas made material misrepresentations when soliciting two investors to invest a total of $83,000. The purpose of the investments was to fund the development and execution of a reverse merger transaction, which never took place. As a result of his conduct, Casa willfully violated Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 and violated FINRA Rule 2020.

(FINRA Case #2016050430201)

Matthew Christopher Maczko (CRD #1888519, Downers Grove, Illinois) submitted an Accept, Waiver and Consent in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the findings, Maczko consented to the sanction and to the entry of findings that he engaged in excessive trading in an elderly customer’s accounts.

The findings stated that Maczko effectively controlled these accounts, which had an average aggregate value of $3 million. Maczko’s transactions in these accounts generated approximately $581,650 in commissions, $84,270 in other fees, and approximately $397,000 in trading losses. This level of trading was unsuitable for the customer given her investment profile, including her age, risk tolerance and income needs.

FINRA Case #2016049383801

Adam Stuart Fritzsche (CRD #2821218, Canterbury, Connecticut) submitted an Accept, Wavier and Consent in which he was suspended from association with any FINRA member in any capacity for one year. In light of Fritzsche’s financial status, no monetary sanction has been imposed. Without admitting or denying the findings, Fritzsche consented to the sanction and to the entry of findings that he made unsuitable recommendations to customers that were inconsistent with the customers’ investment objectives and resulted in over- concentration of their liquid net worth in an alternative investment. The findings stated that, according to its registration statement, the investment was suitable only as a long-term investment for persons of adequate financial means who had no need for liquidity.

At the time of Fritzsche’s recommendations, all of the customers were retired and had conservative investment objectives. Fritzsche’s recommendations resulted in an undue concentration of the customers’ liquid net worth in a single, high-risk, illiquid investment.

(FINRA Case #2014041137501)

Kelly Clayton Althar (CRD #2666723, San Pablo, California) submitted an Offer of Settlement in which he was barred from association with any FINRA member in any capacity. Without admitting or denying the allegations, Althar consented to the sanction and to the entry of findings that he made unsuitable recommendations and engaged in excessive trading in accounts held by an elderly customer.

The FINRA findings stated that Althar engaged in high-volume trading to generate commissions and over- concentrated the customer’s accounts in risky securities, despite the fact that the customer was close to retirement and only wanted low-risk investments. Althar’s trading decimated the customer’s accounts, which constituted the bulk of her net worth and retirement savings.

(FINRA Case #2016048760501)

Edward D. Jones & Co., L.P. (CRD #250, St. Louis, Missouri) submitted an Accept, Waiver and Consent in which the firm was censured and fined $125,000. Without admitting or denying the findings, the
firm consented to the sanctions and to the entry of findings that it overcharged interest
on margin loans totaling approximately $708,000 to the owners of customer accounts.

The FINRA findings stated that the overcharges occurred because the firm did not adequately supervise its system for determining the interest rates on those loans. The firm did not
test its automated system for grouping accounts for the assignment of interest rates on margin loans. Instead, the firm supervised interest on margin loans by reviewing a monthly report from one of its vendors, but that report incorporated the problem with the logic of the firm’s automated system.