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.

2006
UNDISCLOSED SETTLEMENTS/GUARANTEEING AGAINST LOSSES

Read NASD Conduct Rule 2370 and NYSE Rule 352

Sojka directed, encouraged and/or permitted individuals to sign public customers’ names on Account Transfer Forms, making the documents false and inaccurate, without the public customers’ authorization or consent. Sojka promoted and maintained a workplace environment in which individuals were directed, encouraged and/or permitted to affix customer signatures to firm documents without the customers’ authorization or consent. Sojka settled a customer complaint by paying the customer $592.40 without his member firm’s knowledge or approval. 

Kenneth Lewis Sojka : Fined $10,000; Suspended 9 months in all capacities

Davis withdrew $104,000 from a public customer’s annuity contract without her knowledge or approval, and converted the funds for his own personal benefit. Davis entered into a settlement agreement with the customer in which he promised to repay the $104,000, did not notify his member firm that he entered into such agreement and did not repay the customer as promised. 

Robert Thomas Davis III : Barred; Ordered to pay $104,000 plus interest in restitution to a public customer

Amon reallocated a public customer’s sub-account holdings for a variable annuity totaling $13,000 from a guaranteed fixed rate to equity mutual funds without the customer’s knowledge or authorization. Amon agreed to reimburse the customer for his incurred losses as a result of the unauthorized transactions, wrote a check for $577.56, and then had these funds deposited directly into the customer’s annuity without disclosing the settlement to his member firm. 

John Ivey Amon, Jr.: Fined $10,000; Suspended 4 months in all capacities.

Swicegood settled securities-related customer complaints against him without notifying his member firm and provided false information to his former member firm in response to its inquiry concerning the settlement of the customer complaint.

Jerry Todd Swicegood: Fined $10,000; Suspended 20 business days in all capacities.

Lim shared in the loss of a public customer’s account by paying her $35,000 for sustained losses in her securities brokerage account. Lim entered into oral settlement agreements with public customers and did not provide prior notification to his member firm of such settlements. 

Suk Ku Lim: Fined $10,000; Suspended 50 days 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.

Weaver permitted an unregistered person who was also barred from the securities industry to engage in securities transactions. Weaver failed to maintain complete, accurate and current books and records. Weaver guaranteed a public customer against loss in his securities account. Weaver engaged in outside business activities, for compensation, without providing his member firm with prompt written notice. 

Brad Allan Weaver : Barred

Lubow entered into a settlement agreement with public customers in response to a complaint, failed to disclose the settlement agreement to his member firm, and further, failed to satisfy his obligations pursuant to the agreement. 

Nathan Edward Lubow : Fined $10,000; Suspended 1 year in all capacities

• engaged in excessive trading in public customers’ accounts in light of their objectives, financial situations and needs; 
• effected, or caused to be effected, unsuitable transactions or trading on margin in public customers’ accounts without their prior knowledge, authorization or consent; and
• settled a customer complaint without his member firm’s knowledge or consent. 

William Edward Kassar, Jr.: Fined $10,000; Ordered to pay $57,086.28 in restitution; Suspended 6 months in all capacities; Required to requalify by exam as a General Securities Representative

Wessel received $18,145 from a public customer to use the funds to make a supplemental deposit to the customer’s annuity contract, but failed to timely forward the funds. Wessel resolved a customer complaint by depositing $2,796.18 into the customer’s account without informing his member firm. 

James Michael Wessel : Fined $15,000; Suspended 30 days in all capacities

Without prior written authorization from her member firm, Mechling improperly shared in the public customers’ losses when she deposited funds totaling $1,462.50 into the customers’ account to cover losses sustained in connection with a bond that had defaulted on an interest payment. The findings stated that she misrepresented that the payment was not taxable due to the bond’s default status.

Edith Lourdes Mechling: Fined $5,000; Suspended 3 months in all capacities.

Blonsky attempted to settle a complaint with a public customer by paying the customer $2,400 without her member firm’s knowledge or approval. 

Barbara Susan Blonsky: Fined $5,000; Suspended 10 business days in all capacities

Without informing his member firm, Scheurich settled a complaint directly with a public customer on the condition that the customer would retain Scheurich as the broker of record.  Scheurich guaranteed another public customer that her total account value would equal or exceed $50,000, and that he would credit any deficiencies to the account. 

Michael Ray Scheurich: Fined $7,500; Suspended 5 months in all capacities

Logan settled a complaint with a public customer by paying the customer $500 without her member firm’s knowledge or approval.

Rena Logan: Fined $5,000; Suspended 2 months in all capacities

In August 1990, when he was in his 60s, SV (“Mr.V”) opened an IRA account with Stevens at Dean Witter Reynolds Inc. ("DWR") (“the IRA Account”). In December 1990, S and J V (“the Vs”) opened a joint account with Stevens and DWR  (“the Joint Account”). Steven’s serviced both accounts through January 1999, when he ceased servicing customers’ accounts and became a mutual fund wholesaler for Morgan Stanley Funds. However, he did retain his registration. 

Mr. V contends that he had suffered losses resulting from securities transactions Stevens had recommended to him while he was employed with DWR, and that Stevens had paid him approximately $16,000 over a six-year period. Stevens acknowledges that at a meeting with the Vs in 1996, they "expressed concern that they were in financial difficulties" and that later in 1996 "They reiterated their financial distress and threatened to 'make trouble' for me unless I paid them money." 

Thereafter, Stevens made the following payments (five checks totaling $23,000 versus $51,689 in alleged losses) to the Vs: 

• On November 7, 1996, Stevens issued a $6,000 check from his joint checking account at the XYZ Savings Bank to the Vs. 
• On February 14, 1997, Stevens caused a $4,000 bank cashier’s check to be drawn from his account at the ABC bank payable to the Vs. 
• On July 12, 1997, Stevens caused a $3,000 bank cashier’s check to be drawn from his account at the ABC bank payable to the Vs. 
• On April 11, 2001, Stevens issued a $6,000 check payable to the Vs from his joint MSDW securities account. 
• On May 15, 2001, Stevens issued a $4,000 check payable to the Vs from his joint MSDW securities account. 

During the relevant times, Morgan Stanley Dean Witter (MSDW) had a requirement that prohibited its employees from "participating directly or indirectly, in the profits or losses in any client's account". Stevens had read, understood, and “signed off” on the above MSDW policy. On August 27, 2002 the NYSE received a Form U-5 (Uniform Termination Notice for Securities Industry Registration) from MSDW stating that Stevens had been permitted to resign for "failure to follow firm policy regarding complaint reporting and resolution, including making payments to client." 

The NYSE Hearing Panel found that Stevens violated NYSE Rule 352(c) in that he shared in losses from transactions in a customer’s account

William John Stevens: Censure; Barred in all capacities for 4 months