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

EFG Capital International Corp. (Miami, Florida)

The firm was fined $800,000 and ordered to implement supervisory systems and procedures pursuant to FINRA Rule 3110. The firm was said to have had an inadequate WSP and an inadequate AML program. It was found that the firm allegedly failed to correctly supervise and review the business risk associated with payment to non-registered individuals and entities in regard to transaction-based compensation. Suspicious activity was also found in regard to wire transfers in dual customer accounts of the firm and the firm’s Swiss affiliates. The firm also failed to comply with U.S. laws in regard to its “foreign introducer,” meaning that it failed to review and ensure that all legal obligations could be met if in business with this foreign entity. The firm also failed to follow its procedures involving referral agreements and failed to identify and review several AML flags including ownership of the introducer and the number and size of transactions. It was also found that the firm also failed to identify red flags in regard to wire transfers among the firm’s dual customers with its Swiss affiliates. (FINRA Case #2015046020002)

Lek Securities Corporation (New York, NY)

The firm was fined $15,000, as it failed to report short interest positions in foreign listed securities, as the firm claimed it did not know that short interest positions in foreign listed securities were reportable. The firm then corrected its way of reporting these positions and adjusted its WSPs to reflect the updated reporting procedures.

(FINRA Case #2015044892901)

Individuals Barred

Douglas Anthony Leone (Sandy Hook, Connecticut)

Leone was barred from association with any FINRA members due to failure to appear at a FINRA on-the-record testimony. The testimony was in regard to an investigation into Leone’s behavior with a customer account. Leone allegedly engaged in unsuitable recommendations and excessive trading of a customer’s account. (FINRA Case #2016052560002)

Norman R. Sicard Jr. (Gotha, Florida)

Sicard was barred from association with any FINRA members as he refused to appear for a FINRA on-the-record testimony. The investigation was commenced due to Sicard’s failure to disclose a bankruptcy on his U4, receiving an undisclosed loan from a customer and making unsuitable recommendations to a customer. (FINRA Case #2016049841901)

Ahmed Abdelmawla Gadelkareem (Brooklyn, New York)

Gadelkareem was barred from association with any FINRA member firm, as he was alleged to have made abusive and threatening remarks to several employees at his former firm. After Gadelkareem was terminated, he repeatedly harassed individuals via phone and email. Gadelkareem also impersonated a police detective and a FINRA investigator in order to force his firm to settle claims made against him. It was also found that Gadelkareem made false accusations about the firm to the media and investors and also made a complaint to the NYC Bar Association against the firm’s attorney.

(FINRA Case #2014040968501)

Individuals Suspended

Nicholas John Hoetmer (Indianapolis, Indiana)

Hoetmer was suspended from association with any FINRA member for nine months and fined $7,500 as he failed to amend his U4 in a timely manner. In this case, the representative did not disclose on his U4 a Chapter 7 bankruptcy, a federal tax lien and a civil judgement. Hoetmer allegedly filed false U4 amendments and falsely answered and submitted a compliance certification to his member firm that stated he had not had any judgements made against him in the past year when he did. (FINRA Case #2016049359301)

Fatou Camara (Bronx, New York)

Camara was fined $5,000 and suspended for 3 months as a result of going against firm policy and borrowing money from a customer. The representative borrowed $3,000 from a customer and agreed to repay the loan. Camara’s attempt to repay the loan was not successful, as her check was bounced because she had insufficient funds. Camara also attested on her firm’s annual compliance questionnaire that she did not borrow money from a customer. The customer eventually complained about Camara to the member firm, and the firm repaid the customer. (FINRA Case #2017055404901)

Kenneth K. Jobson (St. Petersburg, Florida)

Jobson was fined $5,000 and suspended from association with FINRA member firms for three months. Jobson allegedly failed to give prior written notice for an outside business activity that involved the manufacturing and refurbishing of custom motor homes. Jobson eventually gained an ownership interest in the company where he made $13,200 for planning and marketing. Jobson was also found to have provided a written request for an outside business activity in a fuel services company. Although the request was denied, Jobson continued involvement and gained partnership interest and engaged in planning and marketing activities for the fuel services company. Jobson also attested on a compliance questionnaire that he did not participate in any outside business activity that needed to be disclosed when he actually did participate in outside business activities. (FINRA Case #2016052579702)

These cases along with others can be accessed by visiting:

http://www.finra.org/sites/default/files/publication_file/july_2018_Disciplinary_Actions.pdf

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