The following disciplinary actions were taken against both firms and individuals due to violations of FINRA rules, federal securities laws and MSRB rules.

Firms Fined

The firm Lombard Securities Incorporated in Baltimore Maryland was fined $10,000 for executing municipal securities transactions without having the adequate Municipal Securities Principal registered with the firm. Findings indicated that the firm did not have the correct procedures outlined in their WSP manual to properly supervise these types of transactions. Principals who did not hold the Municipal Securities Principal license were reviewing these transactions which violates FINRA rules and regulations. (FINRA Case #2016047661702)

Potamus Trading, LLC in Boston, Massachusetts was fined $100,000 for transmitting ROEs to OATS that included inaccurately formatted data due to not stamping in milliseconds when the system is formatted to time stamp in milliseconds. The firm also failed to include the handling code of “immediate or cancel.” These inaccurately formatted trade reports were submitted to the FINRA TRF. The firm was also cited for failing to include the appropriate FINRA and SEC rules and regulations regarding OATS procedures in its WSPs. (FINRA Case #2015046920901)

Individuals Fined and Suspended

Richard McCollam from Lafayette, California was fined $10,000 and suspended for nine months due to failure to disclose on the U4. In this instance, the suspended individual failed to disclose two customer arbitrations and six written customer complaints. (FINRA Case #2012035284301)

In another instance, Bret Niemuth from Cedar Rapids, Iowa was fined $5,000 and suspended for eight months for failing to disclose on his U4 the required information regarding criminal behavior. Niemuth was charged with two felonies and pled guilty to a DWI but failed to amend the U4 to disclose the conviction. (FINRA Case #2016051985001)

Individuals Barred

Domingo Gonzalez from Chesapeake, Virginia was barred due to misusing and converting customer’s funds without the customer’s knowledge or consent. After Gonzalez recommended that the customer liquidate an existing IRA with a third party and open an account with his then member firm, the customer received a check in the amount of the liquidation. Gonzalez then took the endorsed check from the customer and instead of opening a new account, he used the check to pay his own expenses. Eventually, Gonzalez repaid the customer the money she was entitled to, but only after she realized he had never deposited the money. (FINRA Case #2017056563301)

Dallas Richardson York from Phoenix, Arizona was barred due to the fact that he did not provide documents to FINRA during their investigation into his termination from a member firm. The member firm filed a U5 due to York’s alleged withdrawing of customer funds without the customer’s consent or knowledge. After allegedly withdrawing the funds, York then debited the  account to purchase cashier’s checks made out to cash and then allegedly cashed those cashier’s checks. (FINRA Case #2017056038801)

These cases along with others can be accessed by visiting:

http://www.finra.org/sites/default/files/publication_file/June_2018_Disciplinary_Actions.pdf

Please contact an ARG Analyst with any questions regarding the matters discussed.