NOTE: Stipulation of Facts and Consent to Penalty (SFC), Offers of Settlement (OS) and Letters of Acceptance, Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions and to the entry of findings.

2007
UNDISCLOSED SETTLEMENTS/GUARANTEEING AGAINST LOSSES

Read NASD Conduct Rule 2370 and NYSE Rule 352

 

 
 
 
Frank Enrique Lumpuy
AWC/#2006005568401/August 2007 

Lumpuy shared in a public customer's loss without prior written authorization from his member firmer the customer before making the deposit into the customer's bank account. 

Frank Enrique Lumpuy: Fined $5,000; Suspended 10 business days in all capacities

Jeffrey Jay Cahn
#2006005134301/August 2007 

Cahn borrowed funds from a public customer in violation of his firmís policy prohibiting registered employees from borrowing from, or lending to, public customers with the limited exception of immediate family members. Cahn settled a customer complaint without his member firmís knowledge or authorization. The sanction was based on findings that Cahn failed to respond to NASD requests for information and documents. 

Jeffrey Jay Cahn: Barred

Alison Esther Taylor (Principal) 
AWC/#E0420040369-04/June 2007

Taylor failed to reasonably and adequately supervise registered representatives who violated various provisions of NASD Rule 2210 and SEC Rule 482 in their communications with the public. Taylor approved some of the public communications. Taylor failed to reasonably and adequately supervise a registered representative with respect to a customer complaint for a loss relating to an investment that the representative settled away from the firm, and Taylor failed to create a written record that there was a problem with the account or to follow-up with the representative prior to his decision to send a letter to the customer and make payment to the customer directly. Neither Taylor nor the representative notified the firm of the issue before payment was made and the letter was sent. 

Alison Esther Taylor: Fined $5,000; Suspended 15 business days in principal capacity only

Plase Michael Tansil 
OS/#2005002229201/June 2007

Tansil made an improper guarantee to public customers, misused customer funds to cover a shortfall regarding the guarantee, made material misrepresentations to customers that their funds would be used for investment purposes, and settled a customer complaint without his member firmís knowledge or consent. 

Plase Michael Tansil : Barred

Carl Thomas Cirillo
OS/#20050000286-03/June 2007

Cirillo employed fraudulent sales practices when, in a private placement, he recommended and sold to public customers units of a company that had minimal assets and no business operations and was owned and controlled by his family member. Cirillo guaranteed a customer against loss. 

Carl Thomas Cirillo: Fined $12,000; Suspended 60 days in all capacities.

Brown Jin Ho (Principa)
AWC/#20050035972-01/March 2007 

Ho signed customersí names on account transfer forms without the customersí knowledge or consent, and submitted them to his member firm to effect the transfer of the accounts from his previous firm to his new firm. After learning that one of the customers had complained about the unauthorized transfer, Ho contacted the customer several times to persuade her to drop the complaint without advising his firm. 

Brown Jin Ho: Fined $10,000; Suspended 4 months in all capacities

Tom Chau 
AWC/#20060050897-01/March 2007

Chau shared in a public customerís trading loss by causing $40,000 to be deposited in the customerís account. Chau did not obtain written authorization from the customer or his member firm before making the deposit. 

Tom Chau: Fined $5,000; Suspended 30 days in all capacities

Adam Michael Stafford
AWC/#2006004408901/February 2007 

Stafford settled customer complaints and did not notify his member firm regarding the settlements. 

Adam Michael Stafford: Fined $5,000; Suspended 30 days in all capacities

Jeffrey Robert Chicola (Principal) 
AWC/#20050022347-01/February 2007

Chicola effected unauthorized trades in public customersí accounts. He failed to reasonably supervise an individual to prevent and/or detect unauthorized trades. Chicola settled a customer complaint without his member firmís knowledge or consent. 

Jeffrey Robert Chicola : Fined $10,000;Suspended 2 years in all capacities

Robert Howard Petretta
AWC/#20050003712-01/January 2007 

Petretta failed to disclose to his member firm a public customerís oral complaint and his $400 payment to the customer to compensate for the surrender charges incurred in connection with cash withdrawals made against a variable annuity policy. By failing to disclose the complaint and the $400 payment, Petrettaís member firm was precluded from conducting a more timely analysis of the customerís written complaint. 

Robert Howard Petretta: Fined $5,000; Suspended 10 business days all capacities

William Andrew Malloy (Principal)
#ELI2004008101/January 2007

Malloy 

  • purchased and sold securities for a public customer at a member firm without providing written notification to his member firm and the executing firm of his association with another firm;
  • entered into an agreement with the customer to share in the profits without his member firmís prior written authorization;
  • engaged in a level of trading activity in public customersí accounts that was excessive in light of the customersí financial situation and objective;
  • settled a customer complaint without his firmís knowledge or authorization; and
  • failed to respond to NASD requests for information and document 

William Andrew Malloy: Barred; Ordered to pay $278,072.59 in restitution

Bill Singer's Comment: I have noticed an increase in NASD cases involving RRs activity in away accounts.  Clearly this will be a regulatory area of focus for 2007.  Keep an eye open for this trend. 
Dale Lee Gilliland (Principal)
AWC/#20050031379-01/January 2007 

Gilliland reimbursed public customers for surrender fees based on oral complaints without notifying his member firm that the surrender fees had been incurred when moving assets to the firm, or that the customers were verbally complaining. 

Dale Lee Gilliland : Fined $5,000; Suspended 10 business days in all capacities

 

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