NOTE: 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.

2006
PRIVATE SECURITIES TRANSACTIONS

Spears participated in private securities transactions and also engaged in an outside business activity for compensation without providing her member firm with the requisite prior written notification. Also, she recommended securities transactions to public customers without having reasonable basis for believing the investment was suitable based on the customers’ financial situations and needs. 

Mary Frances Spears : Barred

Morocco participated in private securities transactions, for compensation, without providing prior notification to, or receiving prior approval from, his member firm. 

Samuel Gasper Morocco: Fined $5,000; Ordered to pay $30,000 disgorgement; Suspended 9 months in all capacities; 

Kitson and Sabharwal participated in private securities transactions without providing prior written notice to, or obtaining approval from, their member firm. They willfully failed to disclose material information on their Forms U4. 

Sandeep David Kitson: Barred

Gurpreet Singh Sabharwal: Fined $10,000; Suspended 6 months in all capacities

Johnson engaged in private securities transactions for compensation without providing prior written notice to, or receiving approval from, his member firm. Also, he failed to supervise a registered representative who engaged in private securities transactions. 

Edward Hinton Johnson: Barred

Smithey participated in private securities transactions and failed to provide prior written notice to, and receive approval from, his member firm. 

David Parker Smithey: Suspended 2 years; Ordered to pay $525,000 plus interest in restitution to a public customer

Ryerson engaged in private securities transactions, for compensation, without providing prior written notice to, and receiving prior written approval from, his member firm. Also, he paid $100,000 in commissions to a non-member firm in connection with variable annuity referrals that he had received. Finally, Ryerson failed to fully and promptly provide on-the-record testimony NASD requested. No additional sanction, however, was imposed for Ryerson’s failure to provide required testimony. 

Robert Michael Ryerson: 

For Private Securities Activities: Fined $230,000; Suspended 2 years in all capacities; Ordered to re-qualify in all capacities

For Payment of Commissions to an Unregistered Entity:  Fined $5,000; Suspended 15 business days in all capacities (suspensions run concurrently)

Queeny he participated in private securities transaction without his member firm’s approval.

James Francis Queeny: Fined $56,000 (of which $51,000 disgorgement of commissions); Suspended 30 days in all capacities

Parks intentionally or recklessly, failed to disclose that he had received compensation from the issuer for his recommendations and sales of a stock to public customers. Parks failed to disclose conflict of interest and compensation to customers in that he knew, or had reason to know, that the agreement to compensate him for the sale of the stock and subsequent payments to him created an actual material conflict of interest at the time of he published research reports regarding the stock. Parks participated in private securities transactions, for compensation, without providing prior notice to, and receiving approval from, his member firm. Parks opened an account with another firm without providing prior notification to his member firm or of his association with the other member firm, and falsely stated that no NASD registered person had an interest in the account on a new account signature card. 

Samuel Conant Parks: Barred

Lancaster participated in private securities transactions and failed to provide his member firm with written notice. 

Gary Lynn Lancaster : Barred.

Hardaker

• acted as a broker-dealer without being registered with the SEC;
• participated in a private securities transaction, for compensation, without providing prior written notice to, and receiving prior written approval from, her member firm; 
• received $543,630 from public customers for the purchase of securities and commingled the monies with unrelated funds subjecting the customer funds to a risk of loss; and
• created and mailed confirmation statements to public customers purporting to evidence the securities purchases (the confirmation statements Hardaker provided to the customers failed to disclose that the price of the shares included a one cent per share markup).

Kimberly Pine Hardaker : Barred

Frankl traded securities through an account maintained at another member firm without providing notice to his member firm or notice of his association with the firm that maintained that account. Also, Frank engaged in private securities transactions without providing prior written notice to his member firm.

Roger Ernest Frank: Fined $17,500; Suspended 15 business days in all capacities

DePalma 

• made an unsuitable recommendation to a public customer in light of the customer’s financial status, investment objective and risk tolerance;
• engaged in private securities transactions without providing prior written notice to, and obtaining written authorization from, his member firm; 
• participated in outside business activities from which he received compensation and failed to provide prompt written notice to his member firm; and 
• falsified records in that he provided confirmations of the customer’s investments that bore the corporate insignia of an entity that had no connection to the customer’s transactions.

Carmine DePalma : Barred

White participated in private securities transactions without providing prior written notice to, or obtaining prior written approval from, his member firm. 

Kevin John White : Fined $5,000; Ordered to disgorge $32,000 in commissions in partial restitution to public customers; Suspended 6 months in all capacities

Kruse engaged in private securities transactions without prior written notice to, and approval from, his member firm. Also, Kruse settled a customer complaint by purchasing back securities he had sold them without informing his member firms. 

Jonathan Edward Kruse, Sr. : Fined $25,750 (includes $15,750 disgorgement of financial benefits); Suspended 1 year in all capacities.

Daigle engaged in private securities transactions and failed to provide his member firm with detailed written notice of the transactions and his proposed role therein, and without receiving prior written approval from his member firm to engage in the transactions. 

Leonard Levite Daigle: No fine in light of Daigle's financial status; Suspended for 6 months in all capacities.

Angelotti participated in an outside business activity, for compensation, and engaged in private securities transactions without providing his member firm with prompt written notice. 

Richard Henry Angelotti: Fined $10,000; Suspended 3 months in all capacities

Scott participated in private securities transactions without notifying his member firm of these transactions and his proposed role therein, and without receiving his member firm’s prior written approval to engage in these transactions. Scott failed to respond to NASD requests for information.

Frank Nicholas Scott, Jr. : Barred

Regano received $619,584.87 from public customers to purchase fixed annuities but failed to follow instructions and used the funds for some purpose other than the customers’ benefit. Regano created fictitious statements that lulled the customers into believing that their funds were used for their intended purpose. Regano engaged in private securities transactions without providing prior written notice to his member firm and obtaining written approval from the firm. 

Philip Leighton Regano: Barred

Jaffe participated in private securities transactions without providing his member firm with prior written notice of the proposed transactions and his role therein.

Edwin Henry Jaffe: Fined $20,000; Suspended 9 months in all capacities

Howie participated in private securities transactions, for compensation, without prior approval from his member firm.

Eric Carlin Howie: Fined $6,000; Suspended 30 days in all capacities.

Covington engaged in outside business activities and failed to provide prompt written notice to his member firm. Also, he engaged in private securities transactions, for compensation, and failed to give prompt written notice to, or receive written approval from, his member firm. Covington failed to respond to NASD requests for documents and to appear for an on-the-record interview. 

Herbert Hunt Covington, III: Barred

REDACTED participated in a private securities transaction without providing prior written notice to, and receiving prior written approval from, his member firm. Also, he effected securities transactions in a public customer’s account based upon the oral trading instructions he had received from a third party, and failed to provide prior notice to, or receive prior written approval from, his member firm to permit him to accept trading instructions from a third party. 

REDACTEDBarred

Shumaker recommended and effected securities transactions in public customers’ accounts without having a reasonable basis for believing that the recommendations and resultant transactions were suitable for them based on their financial situations and needs. Also, he participated in private securities transactions without providing prior written notice to, or receiving approval from, his member firm. 

Michael James Shumaker: Fined $10,000; Ordered to pay $215,000, plus interest, in restitution to public customers; Suspended 6 months in all capacities.

Rodman received $400,000 from a public customer to invest in a purported hedge fund but transferred, or caused to be transferred, approximately $88,270.29 into a bank account that he controlled, and disbursed the funds for non-investment related purposes without the customer’s knowledge, authorization or consent. Rodman engaged in private securities transactions without prior written notice to his member firm describing the securities, his role therein, and whether he received, or might receive, selling compensation in connection with the transactions. He failed to fully respond to NASD requests for information and documents. 

Anthony Michael Rodman: Barred

Raymond participated in private securities transactions without providing his member firm with prior written notices, and without receiving written acknowledgement of those notices from his member firm.

Royce Joseph Raymond : Barred

Misseri effected private securities transactions and failed to provide written notification to, or obtain written approval from, his member firm. He engaged in an undisclosed outside business activity without providing prior written notification to his member firm. 

Bernardo Misseri: Fined $15,000; Suspended 2 years in all capacities

Chyung participated in a private securities transaction without providing prior written notice to, or receiving approval from, his member firm.  Chyung failed to respond to NASD requests for information.

Taek H. Chyung : Barred

The NAC imposed the sanction following appeal of an Office of Hearing Officers (OHO) decision. The sanction was based on findings that Nugent participated in private securities transactions for compensation without providing prior written notice to, and receiving written approval from, his member firm. 

Patrick Orvil Nugent: Barred

Golladay participated in private securities transactions and failed to provide his member firm with prior written notification of his participation in these transactions describing them in detail, his proposed role therein, whether he had received, or might receive, selling compensation in connection with the transactions. He also engaged in outside business activities without providing prompt written notice to his member firm. Golladay solicited $2,000,000 from public customers to fund mortgages, but failed to maintain documentation evidencing what he did with these funds, did not use all the money collected for the stated purpose and transferred portions of the money into other business accounts he controlled, thereby commingling customer funds with the funds of other businesses. Finally, Golladay failed to fully respond to NASD requests for documents and information. 

Roy Golladay, Jr: Barred

MacDuff engaged in private securities transactions outside the regular course of his employment with a member firm, failed to provide prior notice to his firm describing in detail his proposed transactions and his role therein, and failed to receive written approval from his firm. Also, he prepared and distributed sales literature in the form of newsletters to public customers without the knowledge or consent of registered principals of his member firms, and some of these materials contained statements that were unwarranted and misleading, and failed to name the member firm with which he was associated, and failed to file the sales literature with NASD’s Advertising Department. 

Richard Lawrence MacDuff: Barred

Derr participated in private securities transactions, for commission, without providing prior written or oral notification to, and receiving prior written approval from, his member firm. 

Dennis Eugene Derr: Fined $5,000; Ordered to disgorge $90,240 in commissions plus interest to public customers; Suspended 2 years in all capacities

Barish engaged in a private securities transaction and neglected to give prior written notice to, and receive prior written approval from, his member firm. 

Dan Israel Barish: Fined $5,000; Suspended 15 business days in all capacities.

Arnold participated in private securities transactions and received commissions without providing prior written notice to, and receiving prior written approval from, his member firm. 

Stephen Cutler Arnold: Fined $5,000; Required to pay restitution to public customers of $17,655 plus interest; Suspended 90 days in all capacities

Rosenberg participated in private securities transactions without giving his member firm prior written notice of his intent to participate in such transactions and receiving approval for his participation. He failed to respond to NASD requests for documents and information. 

David Michael Rosenberg: Barred

Rhodes engaged in a private securities transaction without prior written notice to, and approval from, his member firm. 

Justin Eric Rhodes: No fine in light of financial status; Suspended 6 months in all capacities

Grace engaged in outside business activities without providing prompt written notice to his member firm. Grace participated in private securities transactions and failed to provide prior written notice to, and receive prior written approval from, his member firm. 

Eric Matthew Grace: Fined $10,000; Suspended 1 year in all capacities.

Gleason participated in private securities transactions for compensation without providing prior written notice to, and receiving prior written approval from, her member firm.

Juliette Suzanne Gleason: Fined $15,000 (including $10,000 disgorgement of commissions); Suspended 1 year in all capacities

Colvin engaged in private securities transactions for compensation without providing written notification to, or obtaining prior approval from, his member firm. 

John Kent Colvin: Barred

Wells participated in private securities transactions and received compensation without providing prior written notice to his member firm.

Randall Leon Wells: Fined $15,000 (includes $2,870 disgorgement of commissions); Suspended 6 months in all capacities

Stearns failed to disclose to his member firm that he engaged in securities transactions with representatives of another firm who owned a beneficial interest in some of the securities that were held in his personal securities accounts, causing the firms to have inaccurate books and records. Stearns engaged in private securities transactions and neglected to give written notice to, and receive written approval from, his member firm prior to engaging in such activities. 

Timothy John Stearns: Fined $6,000; Suspended 1 month in all capacities; Requalify by exam in all capacities.

Mayer engaged in private securities transactions, but failed to give written notice to his member firm and failed to receive written approval from his member firm, prior to engaging in such activities. 

Donald Gerard Mayer: Barred

Marasso participated in private securities transactions without providing prior written notice to, and receiving prior written approval from, his member firm. 

Jeffrey Bruce Marasso: Suspended 90 days in all capacities.

Holden participated in private securities transactions for compensation without providing prior written notification to, and receiving prior written approval from, his member firm.

ADam Wesner Holden: Fined $5,000; Ordered to pay $60,992 in disgorgement; Suspended 1 year in all capacities

Gleason participated in private securities transactions and received commissions without providing prior written notice to, and receiving prior written approval from, her member firm. 

Juliette Suzanne Gleason: Fined $15,000; Suspended 1 year in all capacities.

DeGregorio recommended the purchase of private placements of speculative securities to a public customer without having a reasonable basis for believing that the recommendations were suitable based on customer’s investment objectives, financial situation and needs. Also, he participated in private securities transactions without providing prior written notice to, or receiving written approval from, his member firm. 

Anthony Otto DeGregorio, Sr.: Barred

Davidson engaged in activities outside the scope of his member firm, and accepted compensation without providing his member firm with prompt written notice. He participated in private securities transactions without providing his member firm with written or oral notice for some of the transactions, and gave oral notice, but not written notice, for the remaining transactions.

Alan Richard Davidson: Fined $15,000; "suspended from association with any NASD member in any capacity for 30 business days. Davidson was also suspended from association with any NASD member in any capacity for one year." (NOTE: NASD's terms of suspension are quoted verbatim and do not make sense as written.  Perhaps the one year suspension was meant in all capacities and the 30 business days in principal only?) 

Chapan participated in private securities transactions and received compensation without providing prior written notice to his member firm.

Jeffrey Lew Chapman: Fined $10,000 (includes $1,300 in disgorged commissions); Suspended 3 months in all capacities.

Becker  participated in private securities transactions without prior written notice to, and approval from, his member firm. He paid $233,428 of the firm's funds to himself as compensation without the firm's authorization, other than for the $60,000 to which he was entitled pursuant to his employment agreement, thereby converting these funds for his own use and benefit. 

RAndall Todd Becker: Barred

Ross participated in private securities transactions and failed to provide prior written notice to, and approval from, his member firm. 

Brian Jason Ross: Fined $20,000; Required to pay $79,429.90 in restitution to public customers; Suspended 10 months in all capacities; 

Roskelley participated in a private securities transaction without providing prior written notice to his member firm describing, in detail, the proposed transaction and his proposed role therein, and without stating whether he had received, or might receive, selling compensation in connection with the transaction.

Jared Bryce Roskelley: Fined $22,713 (includes $17,713 commission disgorgement); Suspended 8 months in all capacities.

Locklear participated in private securities transactions without providing prior written notification to, and receiving prior written approval from, his member firm. 

David Ernest Locklear: Fined $10,000; Suspended 6 months in all capacities.

Gorter participated in private securities transactions in which he neglected to give written notice to his employing NASD member firm, and failed to receive written approval from his firm prior to engaging in such activity. 

Thomas Joseph Gorter: Fined $5,000; Suspended 2 months in all capacities.

Chi 

• participated in private securities transactions for compensation, and failed to provide written notification or receive express written authority from her member firm;
• failed to maintain documentation adequately evidencing how she invested $550,000 received from public customers for investment purposes, and commingled portions of these funds into a bank account under her control;
• established brokerage accounts at two other broker-dealers, placed orders in a public customer’s discretionary account at another broker-dealer, and failed to notify these broker-dealers in writing that she was associated with her member firm (and did not notify her member firm in writing of the existence of these accounts). 

Angel Chi: Barred