Financial Industry Representatives Settle FINRA Cases Over Securities Fraud

These financial representatives have settled the Financial Industry Regulatory turned in their Letter of Acceptance, Waiver, and Consent in the securities cases made against them by the Financial Industry Regulatory Authority. By consenting to the sanctions described and the entry of findings, this does not mean they are denying or admitting to the allegations.

New York Registered Principal Accused of Making Misrepresentations and Missions
Neftali Mercedes must pay $97,000, in addition to interest as restitution to customers. He is accused of intentionally making material omissions and misrepresentations about the risks related to speculative securities and an issuer’s financial state.

Per the findings, Mercedes had no reason to make the statements and he made no effort to verify the information that he gave customers or discuss with them the investments’ negative financial performance and condition, which could have altered their purchase choices. FINRA contends that through his actions, which took place over a number of months, the New York registered principal was able to gain financially while investors lost money.

California Registered Principal Allegedly Took Part In Private Securities Transactions Outside His Employment Scope
James Michael O’Brien is now facing an 18-month suspension from associating with any FINRA member. However, because of his financial state, he doesn’t have to pay a financial sanction. The entry of findings accuses him of engaging in private securities transactions that were outside the scope of his employment and he failed to notify the member firm that he worked for of these transactions.

O’Brien allegedly referred investors to an entity that sold the securities as promissory notes. These investments totaled over $2.6M. He is said to have made $125,416 for making the referrals.

Colorado Registered Representative Settles FINRA Case Alleging Inappropriate Recommendations Made Related to REIT and Regulation D Offerings
According to FINRA, Michael Lee Romero recommended that customers buy $760,000 of non-publicly traded real estate investment trusts and non-publicly traded Regulation D offerings that were not in line with these investors’ financial needs and situation. Now, he must pay a $10,000 fine and cannot associate with any FINRA member for 45 days.

Per the new account application that customers signed, they believed they were investing in instruments that came with moderate risks to meet their goals of capital preservation, income, and long term growth. The REITs and Regulation D offerings comprised nearly all of the clients’ liquid net worth and about 46% of their total net worth.

California Registered Representative Ordered to Disgorge Ill-Gotten Gains of $5,000 Plus Interest to Customer
Sean Placido Rodriguez is accused of executing discretion in a client account without that customer’s written consent or his member firm’s written acceptance that the account was discretionary. He allegedly did not have reasonable grounds for recommending that this woman take part in short-term trading or that she have her account concentrated in equity purchases. Yet, per the FINRA findings, Rodriguez proceeded to make the recommendation that the client buy and sell equity securities in amounts that caused undue concentrations of these securities (25-50% of her account’s value when the transactions happened) in her account.

Now, Rodriguez must disgorge ill-gotten gains in partial restitution of $5,000 and interest to this customer.

If you believe you lost money in any of these (or any other) securities cases, contact our securities lawyers today.

FINRA Disciplinary Actions

More Blog Posts:
Financial Representatives Settle with FINRA Over Allegations Related to Excessive Commissions, Elder Financial Fraud, and Funneling Client Funds for Personal Gain, Stock, Stockbroker Fraud Blog, March 8, 2013

Court Upholds Ex-NBA Star Horace Grant $1.46M FINRA Arbitration Award from Morgan Keegan & Co. Over Mortgage-Backed Bond Losses, Stockbroker Fraud Blog, October 30, 2012

Financial Firms Settle with FINRA: ES Financial Services Resolves Solicitation of Non-US Investors Allegations and Lincoln Financial Securities Consents to Entry of Findings Alleging Inadequate Supervision, Institutional Investor Securities Blog, March 11, 2013