Qunaco Mitchell 
(SFC/HPD 04-69/April 2004)

In or about January 2003, Mitchell was charged with one felony count of Embezzlement of $20,000 or more of customer funds from the Firm, a violation of Michigan Compiled Laws Section 750.1745. On or about January 13, 2003, in the Circuit Court of Genesee County, Michigan, Mitchell entered a plea of guilty, which was accepted by the Court, to one count of Attempted Embezzlement, in violation of Michigan Compiled Laws Section 750.1745A, a felony, and she was convicted of that offense.  On or about March 25, 2003, the Circuit Court of Genesee County sentenced Mitchell to six months in jail, five years probation, and ordered her to make restitution to the Firm of approximately $61,550. The Firm had previously recovered approximately $40,487 from Mitchell’s personal accounts held at the Firm. 

NYSE found that Mitchell engaged in acts detrimental to the interest or welfare of the Exchange in that she was convicted of the criminal offense of Attempted Embezzlement, a felony, which involved the theft of customer funds which occurred during the course of her employment at a member firm.

Censured; Permanent Bar in all capacities

Sandra Marie  Butay
(SFC/HPD 04-70/April 2004)

In connection with her employment at the Firm, Butay completed and signed an employment application, dated July 19, 2002, and answered "no" to the following: “Have you ever been convicted of, or pled guilty or nolo contendre to any criminal action, felony or otherwise [,] within the United States within the last 10 years?” In or about January 2003, the Firm learned from the background investigation that it had conducted that Butay had been convicted of the aforementioned felony. At that point, the Firm had already terminated Butay’s employment for unrelated reasons.  

On or about January 21, 2003, the Exchange received a Form RE-3 (“Submission of Required Information Pertaining to … Registered and Non-Registered Employees…”) from the Firm reporting that Butay had failed to report her felony conviction in her employment application to the Firm. 

NYSE found that Butay engaged in conduct inconsistent with just and equitable principles of trade by failing to disclose, on an employment application submitted to her member firm employer, a prior felony conviction which made her subject to a statutory disqualification. 

Censured; Barred for 2 years in all capacities

Karla Zorina Wilkie
(AWC/C10040020/April 2004)

WMAT 

Fined $7,500; Suspended 25 days in all capacities.

Jimmy Ji Zhou
(AWC/C02040013/April 2004)

WMAT 

Fined $5,000; Suspended 9 months all capacities.

William Domizio Sargent
(AWC/CLI040005/April 2004)

MAT 

Fined $3,500; Suspended 45 days in all capacities.

Max M. Quasem 
(OS/C02040004/April 2004)

MAT 

Fined $2,500; Suspended 30 days in all capacities.

Paul Joseph Pollack
(OS/C01030034/April 2004)

MAT 

Paul Joseph Pollack

Fined $10,000; Suspended 10 business days in all capacities.

Collin Jesus Olympius
(AWC/C02040014)/April 2004)

MAT 

Collin Jesus Olympius
Fined $2,500; Suspended 30 days in all capacities.

Clifford R. James
(OS/C04030065/April 2004)

MAT; Failed to respond to NASD requests for information 

Barred

Joseph S. Germano 
(AWC/C02040010/April 2004)

WMAT

Barred

William David DeLee
(AWC/C9A040005/April 2004)

WMAT 

Fined $5,000; Suspended 6 months all capacities.

Timothy Mark Carder 
(AWC/C3A040013/April 2004)

WMAT 

Fined $5,000; Suspended 3 months all capacities.

First Montauk Securities Corporation and Paul Lieberman 
(AWC/C3A040014/April 2004)

First Montauk failed to 

• promptly amend Forms U4 and U5 for representatives after becoming aware of information that triggered an obligation to amend the forms;
• comply with NASD Rule 3070 in that the firm failed to timely report arbitration awards and/or settlements; and
• report terminations for cause. 

In addition, NASD determined that the firm's written supervisory procedures were not reasonably designed to achieve compliance with Form U4 and Form U5 amendments, 3070 disclosure reporting, and the identification of responsible principals.

Censured; Fined $45,000

First Commonwealth Securities Corporation and Alonzo Simmons 
(AWC/C05040015/April 2004)

Firm and  Simmons consented to the described sanctions and to the entry of findings that the firm participated as co-managing underwriter in negotiated municipal bond issues and, acting through Simmons, failed to file Municipal Securities Rulemaking Board (MSRB) Form G-37/38 reporting its underwriting activity. Also, Simmons failed to keep his application for registration current in that he failed to disclose that he had been the subject of a formal NASD disciplinary action and failed to disclose his association in outside business activities. 

Patrick Michael Kelly
(SFC/HPD 04-55/March 2004)

Patrick Michael Kelly was arrested on or about September 11, 2001, as a result of a motor vehicle stop by the police, and on or about September 13, 2001, was charged in the Superior Court of California with two offenses: 

1. a violation of Section 148.9 of the California Penal Code, willfully identifying oneself to a peace officer upon detention as a fictitious person in order to evade court process and proper identification, a misdemeanor (the “Misdemeanor Charge”) and 

2. a felonious violation of Section 113500(a) of the California Health and Safety Code (“the Felony Charge”). {Note:  As cited by the NYSE this appears to be in error as there does not appear to be a Section 113500(a) although there is a Section 11350(a)}

On or about September 19, 2001, Kelly pled guilty to the Misdemeanor Charge and the Felony Charge and was so convicted on September 19,2001, and January 14, 2003, respectively.

Kelly became subject to a statutory disqualification on or about September 19, 2001, when he was convicted of the Misdemeanor Charge, which involved knowingly and willfully making a false representation. In addition, Kelly is subject to a statutory disqualification by virtue of his conviction of the Felony Charge on or about January 14, 2002, and, as such, is subject to a statutory disqualification until on or about January 14, 2012.

On or about May 6, 2002, the NYSE received a Form U-5 from The Seidler Companies Incorporated (the “Firm”), reporting that the Firm had terminated Kelly’s employment because he was subject to a statutory disqualification. During the period of September 2001 through March 2002, Kelly failed to report to his member firm employer his criminal history, including his criminal convictions that made him subject to a statutory disqualification. Kelly also made misstatements about his criminal history on amended Uniform Applications for Securities Industry Registration or Transfer (“Forms U-4”) filed with the Exchange. 

While employed at the Firm, Kelly did not report to the Firm his arrest and convictions of the Misdemeanor Charge and the Felony Charge. On or about October 18, 2001, Kelly caused the Firm to file an Amended Form U-4 with the Exchange. In the Amended Form U-4, Kelly was asked the following Criminal Disclosure Questions: 

Kelly falsely answered “no” to the above questions.  

On or about December 13, 2001, Kelly signed a “Certification” that the Firm requires of its employees once per year. Section I of the Certification provides: [e]xcept as previously recorded, I am not presently….[t]he subject of any proceedings or convictions of the matters described in questions 23A through 23N of Form U-4”. This Certification was false.  On or about March 4, 2002, Kelly caused the Firm to file a second Amended Form U-4 with the Exchange. In that filing, Kelly answered “no” to the Criminal Disclosure Questions in Sections 23A and 23B, which was not true. 

The NYSE found that Kelly:

I. Violated Exchange Rule 351(b), by failing to promptly report to his member organization employer his arrest and convictions that occurred during his employment with the Firm, which subjected him to a statutory disqualification. 

II. Violated Exchange Rule 476(a)(6) by making one or more misstatements and/or omissions of fact to his member organization employer about his arrest and convictions that occurred during his employment with the Firm, which subjected him to a statutory disqualification. 

III. Violated Exchange Rule 476(a)(10) by making one or more misstatements and/or omissions of fact on one or more amended Form U-4s filed with the Exchange. 

IV. Caused a violation of Exchange Rule 345.12 by submitting one or more amended Form U-4s containing false information.

Censure and a 10 year Bar in all capacities.

Bill Singer's Comment

Some folks just never get it.  Once you've been through an "intake" into the criminal justice system, it's virtually inevitable that your fingerprints (when taken for your securities industry registration) will match those taken during your arrest.  It's also worthwhile to consider the significant impact that even relatively minor criminal records can have on your ability to get licensed.

Darrel Alan Hordern
(SFC/HPD 04-37/March 2004)

Darrel Alan Hordern, a former non-registered employee with Salomon Smith Barney Inc. (the “Firm”), failed to disclose that he was arrested and pled no contest to the second degree felony of Aggravated Assault with a Deadly Weapon during the term of his employment. The conviction made him subject to statutory disqualification. Moreover, Hordern, during an earlier term of employment with the Firm, failed to report that he pled guilty to Assault Causing Bodily Injury, a misdemeanor, and was arrested for Driving While Intoxicated, a class B misdemeanor. 

At the time of Hordern’s hiring by the Firm as a non-registered mail clerk at its Dallas,Texas branch in August 1995, Hordern had pending the charge of Assault Causing Bodily Injury, a class A misdemeanor. Hordern pled no contest to the charge on July 2, 1996, during the term of his employment, and was sentenced to one year of incarceration and two years probation. Holdern did not report this conviction to the Firm. In addition, on August 17, 1997, during Hordern’s first term of employment at the Firm, Hordern was arrested and charged with Driving While Intoxicated (“DWI”), a class B misdemeanor under Texas Penal Code section 49.04. Hordern, although he was an employee at the time, did not report this arrest to the Firm. 6. On or about April 1999, Hordern was re-hired in a non-registered capacity as a cashier in the Southlake, Texas branch of the Firm. During this period of employment with the Firm, Hordern was arrested and charged with Aggravated Assault with a Deadly Weapon, a second degree felony under Texas Penal Code section 22.02(A)(2). Moreover, Hordern pled “no contest” to the charge on March 3, 2000, thereby becoming subject to statutory disqualification pursuant to Section 3(a)(39) of the Securities Exchange Act of 1934. Hordern had never informed the Firm of his arrest or his no contest plea even though he was employed at the Firm at the time these events occurred. . Background and Jurisdiction 1. Darrel Alan Hordern ("Hordern”) was born on April 7, 1974 and entered the securities industry as a non-registered employee at the Dallas branch office of the Firm in August 1995. Hordern resigned from the Firm in June 1998. Hordern was re-hired in a non-registered capacity in April 1999 as a cashier in the Southlake, Texas branch of the Firm. On July 22, 2002, Hordern again resigned from the Firm, and has not been employed in any capacity in the securities industry since that time. 2. Enforcement opened its investigation of Hordern upon the receipt of a Form RE-3, dated July 26, 2002, notifying the Exchange that Hordern was arrested and pled no contest to the second degree felony of Aggravated Assault with a Deadly Weapon, pursuant to section 22.02(A)(2) of the Texas Penal Code. The Firm’s internal investigation uncovered that Hordern was both arrested for, and convicted of, this 2 crime during the term of his employment. Hordern had failed, however, to notify the Firm of his arrest and no contest plea. 

Overview 3. Hordern 

Kathleen O'Dowd-Hoover was arrested on the felony charges of Felony Theft and Felony Fraud, and on June 15, 1998, she pled guilty to one count of Theft, a felony, in the Superior Court of Arizona. On June 15, 1998, O’Dowd-Hoover was sentenced to 120 days incarceration, $4,053 restitution, and probation of three years. O’Dowd-Hoover is statutorily disqualified from employment in the securities industry until June 2008 as a result of her felony theft conviction.

In connection with her non-registered employment at Edward D. Jones & Co. Inc. (the ”Firm”), O’Dowd-Hoover prepared and completed an application for employment dated September 23, 2002 that asked: “Have you ever been arrested or indicted for any felony…?” She falsely checked the box marked “No.” 

On December 31, 2002, the NYSE received a Form RE-3 from the Firm reporting that O’Dowd-Hoover’s employment with the Firm was terminated on December 27, 2002 as a result of O’Dowd-Hoover’s failure to disclose on an employment application that she had been convicted of Felony Theft. She responded to an initial NYSE inquiry by admitting she provided inaccurate information to the Firm “by mistake,” in applying for part time employment in a hard hit local economy.   She did not submit an Answer to the Charge Memorandum, and defaulted at the hearing in this matter.   

The Panel found that Hordern violated Exchange Rule 351(b) by failing to report arrest and conviction which made him subject to statutory disqualification.

The Hearing Panel, by unanimous vote, reduced the penalty consented to by Mr. Hordern of a censure and an eleven year bar to a censure and  a 10 year bar in all capacities.  At the hearing, the Division of Enforcement noted that there had been a one-year passage of time since Mr. Hordern initially agreed to this penalty, which encompasses the remaining period of statutory disqualification, as well as an additional period for the failure to report the matter to his employer. The Division of Enforcement acknowledged, therefore, that a one-year reduction of the penalty agreed to would better reflect NYSE precedents in such matters. 

Kathleen O'Dowd-Hoover
(HPD 04-39/March 2004)

Kathleen O'Dowd-Hoover was arrested on the felony charges of Felony Theft and Felony Fraud, and on June 15, 1998, she pled guilty to one count of Theft, a felony, in the Superior Court of Arizona. On June 15, 1998, O’Dowd-Hoover was sentenced to 120 days incarceration, $4,053 restitution, and probation of three years. O’Dowd-Hoover is statutorily disqualified from employment in the securities industry until June 2008 as a result of her felony theft conviction.

In connection with her non-registered employment at Edward D. Jones & Co. Inc. (the ”Firm”), O’Dowd-Hoover prepared and completed an application for employment dated September 23, 2002 that asked: “Have you ever been arrested or indicted for any felony…?” She falsely checked the box marked “No.” 

On December 31, 2002, the NYSE received a Form RE-3 from the Firm reporting that O’Dowd-Hoover’s employment with the Firm was terminated on December 27, 2002 as a result of O’Dowd-Hoover’s failure to disclose on an employment application that she had been convicted of Felony Theft. She responded to an initial NYSE inquiry by admitting she provided inaccurate information to the Firm “by mistake,” in applying for part time employment in a hard hit local economy.   She did not submit an Answer to the Charge Memorandum, and defaulted at the hearing in this matter.   The Panel found she had violated NYSE rules.

Censure and a 7 year Bar in all capacities.

Luis A. Delacruz
(SFC/HPD 04-40/March 2004)

During his approximate 23-year career in the securities industry, Luis A. Delacruz had been employed in a nonregistered capacity. His last position was with Salomon Smith Barney Inc.(n/k/a Citigroup Global Markets Inc.)( the "Firm"), where he was employed as an assistant vice president in the Firm’s  fixed income operations department from October 3, 1988 to July 16, 2002, the date the Firm terminated his employment. On or about April 27, 1997, while employed as a non-registered employee with  (“the Firm”), Luis A. Delacruz was arrested in Bergen County, New Jersey and charged with Causing or Attempting to Cause Bodily Injury and Resisting Arrest. On or about July 23, 1997, in the Superior Court of Bergen County, New Jersey, Delacruz was convicted of one count of Causing or Attempting to Cause Bodily Injury, a felony, and received a sentence of 18 months probation and was assessed a fine of $125. 

Delacruz failed to advise the Firm of his arrest, felony conviction and status as a statutorily disqualified individual. On or about June 13, 2002, the Firm submitted Delacruz’s fingerprints to the United States Department of Justice in an attempt for Delacruz to obtain his Series 7 registration. On or about June 13, 2002, Delacruz completed a Form U-4 to be electronically submitted. 

Delacruz falsely responded to both questions by electronically checking the adjacent boxes marked “No."  The Firm’s Compliance Department was notified of Delacruz’s criminal record on or about July 15, 2002, and promptly terminated Delacruz’s employment on or about July 16, 2002. 

The NYSE found that Delacruz:

I. Engaged in conduct inconsistent with just and equitable principles of trade by failing to disclose, on a Form U-4 submitted to his member firm employer, a prior criminal conviction which made him subject to a statutory disqualification. 

II. Caused a violation of Exchange Rule 345.12 by submitting a Form U-4 containing false information. 

III. Violated Exchange Rule 476(a)(10) by making a misstatement and/or omission of fact on his application for registration filed with the Exchange.

Censure and a 6 year Bar in all capacities.

Bill Singer's Comment

This one sort of takes your breath away.  A 23 year career on the Street is trashed.  One wonders whether the prompt and immediate disclosure of the criminal event might have had a substantially different result.  Yes, he was a convicted felon, but he wasn't sentenced to serve any actual time (sentence was probation) and his fine was $125.  Depending on the facts, this may well have been one of those cases in which an application for his continuance might well have been granted --- or, if not, perhaps the next employer would have been given acceptance to hire him.  As things now stand, it's at least six years before he's likely to get any consideration on a statutory disqualification application and, given the facts, I doubt such a ruling will be favorable.

Edward D. Jones & Co., L.P.
(SFC/HPD 04-32/March 2004)

Edward D. Jones & Co., L.P. (the "Firm") is a  retail securities business presently conducted by approximately 8,669 registered representatives occupying approximately 8,340 branch offices. The Firm's branch offices are not staffed with branch office managers. Instead, supervision of the Firm’s registered representatives is carried out by the Firm's field supervision directors and the Firm's compliance and oversight departments. In the years 1999-2001, the Firm employed an average of approximately 27,000 employees.

This matter was opened by Enforcement as a result of several referrals from the Exchange’s Division of Member Firm Registration’s Qualifications & Registrations department (“Q&R”). These referrals indicated that the Firm employed a number of individuals who were subject to statutory disqualifications and possibly subject to statutory disqualifications, even though they had disclosed the existence of criminal convictions on employment applications to the Firm at the time they were hired.  By letter dated December 14, 2001, the Exchange notified the Firm that it was conducting a formal investigation of the matters set forth above. 

Consequently, between 1999 and 2002, (“the relevant period”) the Firm employed individuals whom it knew or should have known were subject to statutory disqualification based on the criminal history they disclosed on their employment applications. The Firm’s inadequate procedures also resulted in its failure to reasonably and promptly investigate employees whom it should have reasonably known were potentially statutorily disqualified. 

During the relevant period, the Firm employed at least four individuals each of whom was statutorily disqualified as the result of a criminal conviction (for felony narcotics possession, forgery, filing a false instrument, and conversion of U.S. government property, respectively) prior to being hired by the Firm. These four individuals were hired in 2000. 

During the relevant period, Firm procedures required job applicants to complete, among others documents, an employment application, which inquired whether the applicant had ever been arrested or convicted of a crime. At or about the time of hire, some individuals disclosed to the Firm the existence of a criminal conviction. Notwithstanding, the Firm employed such individuals but did not timely initiate an investigation and did not timely terminated. Pointedly, the Exchange noted that some investigations were only initiated after inquiries by the Exchange. The Firm also failed to promptly report to the Exchange its association with these statutorily disqualified employees once it was aware of these convictions, and failed to timely report certain convictions. 

Prior to January 2002, the Firm had separate procedures for evaluating the statutory disqualification status of registered and non-registered employment applicants. The Firm allocated various responsibilities concerning the background investigations of applicants and employees to different divisions of the Firm’s human resource and compliance departments. These departments within the Firm did not coordinate their efforts or effectively communicate with one another in performing these background investigations. By failing to have a centralized procedure for evaluating the statutory disqualification status of applicants and employees, on various occasions the Firm was unaware of the complete status of individuals’ background investigations and consequently did not reasonably investigate individuals who were potentially statutorily disqualified. During the relevant period, the Firm failed to reasonably investigate at least seven individuals who were potentially statutorily disqualified, and employed them for an unreasonable period of time.  In some instances, the Firm failed to timely investigate employment applications on which applicants revealed the existence of arrests and or convictions that should have raised concerns that these employees were possibly statutorily disqualified. In addition, some applicants were permitted to begin employment before they completed an employment application or answered any questions concerning criminal history. Further, several months frequently lapsed between the initial notice of these employees’ potential statutory disqualification and their termination, as a result of the Firm affording unreasonable leeway to employees who were slow in complying with the Firm’s requests for information concerning their criminal history. 

In considering sanction, the Panel noted that the Exchange’s investigation did not reveal that there was any harm to customers as a result of the employment of individuals who were statutorily disqualified or potentially statutorily disqualified. Further, the Firm had advised the Exchange that in January 2002 it implemented new procedures that centralized background review for all employees within the Background Review Unit of the Firm’s Compliance Division. These enhanced procedures provide for, among other things, the more prompt resolution of issues occasioned by potentially statutorily disqualified individuals. 

The Firm was found to have violated:

I. Exchange Rule 346(f), by employing individuals, whom the Firm knew, or in the exercise of reasonable care, should have known, were subject to statutory disqualification. 

II. Exchange Rule 351(a)(9), by failing to promptly report its association with persons subject to statutory disqualification. 

III. Exchange Rule 351(a)(5), by failing to promptly report an employee’s arrest or conviction to the Exchange. 

IV. Exchange Rule 342, by failing to provide for, establish, and maintain adequate procedures and controls, including a system of follow-up and review of its business activities, to ensure compliance with Exchange Rules and federal securities laws relating to employment of statutory disqualified individuals.

Censure and a $100,000 fine. 

Bill Singer's Comment

Another concise decision from NYSE.  Compliance staff should note the emphasis on not only timely investigating the backgrounds of new hires, but also the need to promptly terminate such individuals when it is discovered that they have problematic criminal histories.  However, I again find myself wondering if a smaller firm would have gotten off with merely paying a paltry fine (relative to revenues, that is).

Tina Nicole Mayhand a/k/a Tina Nicole Jackson
(SFC/HPD 04-38/March 2004)

While seeking a position with the Firm, on or about June 7, 2001, Mayhand completed an employment application (“Application”). Question 3(a) of the regulatory questionnaire part of the Application asked, “Have you ever been: Convicted of any crime – either a felony or misdemeanor, or pleaded nolo contendere (no contest)?” To question 3(a) of the regulatory questionnaire part of the Application, Mayhand falsely answered “NO”. On or about March 27, 2003, the Firm reported to the Exchangevia Form RE-3, Submission of Required Information Pertaining to Members, Member Organizations, Allied Members, Registered and Non-Registered Employees (“Form RE-3”), that on February 26, 2003 Mayhand’s employment was terminated after the Firm determined that she was subject to a statutory disqualification.

To date, Mayhand has failed to comply with the Exchange’s requests for a written statement. 

The NYSE found that she:

I. Engaged in conduct inconsistent with just and equitable principles of trade in that she failed to disclose a prior felony conviction, which made her subject to a statutory disqualification, on an employment application submitted to her member organization employer. 

II. Violated Exchange Rule 477 in that she failed to comply with written requests by the Exchange for information concerning matters that occurred prior to the termination of her status as a non-registered employee of a member organization.

Censure and Bar for 11 years in all capacities. 

Bill Singer's Comment

You wouldn't think that a phone receptionist could get into so much trouble.  Nonetheless, word to the wise, take nothing for granted.  Not in this day and age.

Neal Wade Schmidt 
(OS/C04030052/March 2004)

Failed to update and disclose material information on his Form U4.

fined $2,500; Suspended 6 months in all capacities.

Gary Joseph Redding 
(LI030021/March 2004)

WMAT (amend U4) and failed to respond to NASD requests for information.

Barred

George Arturo Perez
(C9B030032/March 2004)

WMAT 

Barred 

John Joseph Liselli
(AWC/C3A040008/March 2004)

MAT

Fined $5,000; Suspended 3 months in all capacities.

Michael Scott Blanchard
(AWC/C3A040012/March 2004)

WMAT

Fined $7,500; Suspended 1 year all capacities.

Ladenburg Capital Management, Inc.
(AWC/CLI040003/March 2004)

Firm failed to file, and to timely file

• amended Uniform Applications for Securities Industry Registration or Transfer (Forms U4) concerning customer complaints and arbitration statements of claim against registered representatives employed by the firm, and

• amended Uniform Termination Notices for Securities Industry Registration (Forms U5). 

Firm failed to report arbitration awards rendered against the firm and a registered representative within 10 business days to NASD's 3070 Complaint Reporting System. 

In addition, NASD found that the firm did not properly accept transactions in ACT in which it acted as the contra-party to the transaction by failing to accept trades in ACT with the required ".S" short sale indicator. Firm failed to obtain best execution in sale transactions, resulting in losses to public customers. Firm failed to establish, maintain, and enforce adequate written supervisory procedures reasonably designed to achieve compliance with NASD's By-Laws and rules addressing the filing of amended Forms U4 and Forms U5 in the event of customer complaints or arbitration claims.

Censured; Fined $42,500, and Ordered to pay $911, plus interest, in restitution to public customers.

Jacob H. Loeffler
(SFC/HPD 04-13/January 2004)

Posting Communications Concerning Securities on the Internet Without Firm Approval

While employed by Ingalls and Snyder (in an unregistered capacity), Loeffler researched a development-stage pharmaceutical company (the “Company”), which traded on the Nasdaq National Market. Beginning in November 2000 and continuing through August 2002, Loeffler bought and sold shares of the Company on several occasions. On February 7, 2001, officers of the Company conducted a  road shows at Ingalls & Snyder that Loeffler attended. From February 6 to February 9, 2001, during the time frame in which Loeffler purchased the Company shares and attended the Company’s presentation at Ingalls & Snyder, he participated on an Internet message board devoted to the Company’s stock. Under the screen name "madriverglen_2000," Loeffler posted at least ten messages, stating, inter alia, that he attended a meeting with the management of the Company that was part of a series of presentations to investment banks in New York City. Loeffler’s messages discussed the Company’s stock and the progress the Company allegedly made in its development of certain drugs.

Loeffler's postings violated Ingalls & Snyder’s policy against posting securities recommendations on the Internet, as set forth in its compliance manual, which Loeffler received. On or around February 9, 2001, through routine supervisory reviews, Ingalls & Snyder detected Loeffler's Internet postings and terminated his employment. By posting unapproved electronic communications to the public and posting unapproved communications containing speculative statements on securities in which he held an interest, Loeffler violated Exchange Rule 472(a).

Loeffler’s Failure to Disclose his Criminal History

On March 2, 1993, Loeffler was arrested and charged in the State of Colorado with two felonies (subsequently dismissed) and one misdemeanor for marijuana possession (to which he plead guilty). On March 23, 1993, Loeffler was sentenced to probation and fined $400.

On or about March 21, 1993, Loeffler was arrested for larceny, under $50, in connection with his misappropriation of funds, a violation of the Municipal Code of the Town of Vail, section 9.22.020 (larceny was not categorized thereunder as a felony or misdemeanor). Loeffler pleaded guilty and served two days in the Eagle County jail from April 8 to April 10, 1993.

Loeffler became employed by CMJ as a trading assistant on the Floor and accordingly completed a Form U-4, dated March 8, 1999 ("the March 1999 Form U-4"), on which he failed to disclose his criminal history. Subsequently, Loeffler submitted an amended Form U-4 dated June 14, 1999 (the "June 1999 Form U-4") on which he disclosed that he was criminally charged in 1993 with cultivation of marijuana, but failed to disclose that he was charged with two felonies; he indicated only that the disposition of the charge was the following: "Possession of marijuana, 1 year probation, $300-400 fine, misdemeanor." In October 1999, as part of CMJ's merger into Wagner Stott, Loeffler completed a Wagner Stott employment application, dated October 8, 1999, which asked, "Have you been convicted of any law violation (except a minor traffic violation)? If yes, please explain." Loeffler checked "yes" and wrote, "misdemeanor 18 years old." He failed, however, to disclose the larceny conviction. Loeffler failed to disclose his larceny conviction to Wagner Stott until April 2000. In July 2000, Wagner Stott terminated his employment.

Loeffler engaged in conduct inconsistent with just and equitable principles of trade and violated Exchange Rules 345.12 and 476(a)(10) by making misstatements and omissions about his prior criminal history on an employment application and several Forms U-4 (Uniform Application for Securities Registration and Transfer).

Censure and two year bar.

Kenneth Rogers
(HPD 04-25/February 2004)

On April 6, 2000, Rogers was arrested and charged with the crimes of eluding, speeding, reckless driving and unregistered vehicle, when he failed to bring the vehicle he was operating to a full stop after being signaled to do so by a law enforcement officer (a chase ensued in which Rogers was eventually apprehended and charged). On August 30, 2000, Rogers plead guilty to the reduced charge of Eluding in the Third Degree, a felony. On November 17, 2000, Rogers was sentenced to two years of probation and the payment of all applicable court fees. 

On December 20, 2001, Rogers completed a written application for a management trainee position at the Firm. The application asked the following question, "Have you ever been convicted of or pleaded guilty to a criminal offense in this country … i.e. misdemeanor or felony, but not including minor traffic violations or any conviction as a youthful offender or juvenile?" Rogers indicated "No" by checking the corresponding box. This statement was not accurate in light of his felony conviction for Eluding in the Third Degree. In connection with his employment, on June 3, 2002, Rogers' fingerprints were submitted to the Federal Bureau of Investigation. On June 14, 2002, the Firm was notified that Rogers had a prior conviction. 

The Securities Exchange Act of 1934 ("the Exchange Act") Sections 3(a)(39)(F) states that a person is subject to statutory disqualification with respect to membership or participation in, or association with a member of a self-regulatory organization if such member has committed …. any offense specified in subparagraph 4 of Section 15b. Section 240.15b3-1(4)(B)(iii), specifies, in pertinent part, that a person is also statutorily disqualified when he or she "has been convicted within ten years preceding the filing of any application for registration … of any felony…."  Based on the above Rogers failed to disclose his prior felony conviction on his employment application. He continues to be statutorily disqualified until August 2010.

Censure and Barred for eight years

Heather Ann Mann 
(C9A030033/February 2004)

Mann willfully failed to disclose a material fact on her Form U4, and then failed to respond to NASD requests for documents and information.

Barred

David Anthony Mauros
(AWC/C07040001/February 2004)

WMAT

Fined $5,000; Suspended 6 months in all capacities.

Jairzinho Merzius
(AWC/C10040003/February 2004)

WMAT

Fined $5,000; Suspended 2 years in all capacities

Heather Jean West
(AWC/C8A030088/January 2004)

WMAT

Fined $5,000; Suspended 1 year in all capacities.Barred

Rafael Villard
(C9B030029/January 2004)

XR; Villard failed to respond to NASD requests for information; The findings also stated that Villard failed to disclose information on his Form U4. 

Barred

Hin Chun Tang
(AWC/C10030105)/January 2004)

WMAT

Fined $5,000; Suspended 1 year in all capacities

Allen K. Sihatrai
(C05030030)/January 2004)

MAT

Barred (sanction based on findings of failure to respond to NASD requests for information)

Melvin Rokeach
(AWC/C10030106)/January 2004)

W

Fined $7,500; Suspended for 6 months in all capacities.

Olu T. Lawal 
(OS/C07030046)/January 2004)

W

Barred with right to apply after 2 years

Bill Singer's Comments:

Interesting concession by NASD to allow a right to apply after 2 years.  Would have liked to have known why this right was granted.

Robert Edward Bouch
(C10030056/January 2004)

W; Bouch converted $469,396.88 from public customers and  and failed to respond to NASD requests for information.

Barred

Financial West Group and Jeffrey Keith Rose
(AWC/C02030070/January 2004)

BD, acting through Rose, failed to XR/TR; XA; and establish, maintain, and enforce written procedures identifying the individual(s) responsible for ensuring the timely filing of Rule 3070 reports and amendments to Forms U4 and U5.

Censured; Fined $10,000 joint and severally

Bill Singer's Comment

Make sure you learn to distinguish between those matters required to be reported on the Uniform Forms and the information required to be filed pursuant to NASD Rule 3070.  This tends to trip a lot of folks up.

Birchtree Financial Services, Inc. 
(AWC/CC04030059/January 2004)

The BD, acting through an unnamed individual, TR; XA

Censured; Fined $10,000 ($5,000 of which is joint and several with an unnamed individual)

Essex National Securities, Inc. 
(AWC/C10030112/January 2004)

XR$ 

Censured; Fined $25,000 (including $7,000 disgorgement)