NOTE: Stipulations of Fact 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 & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.

Michael Thomas DiPuppo (Supervisor) and Robert Michael DiPuppo
AWC/2008013742101

The DiPuppos member firm had in place a supervisory system for the firm’s variable annuity transactions specifying that variable annuity transactions that exceeded 50 percent of the lower end of the customer’s net worth bracket required additional supervisory review concerning potential liquidity issues. The DiPuppos disagreed with the firm’s policy and, to circumvent the system, they altered the net worth of customers to a higher bracket to avoid the 50 percent threshold that would have flagged them on a report and required additional review. By altering customer net worth information, the DiPuppos caused their firm’s books and records to be false. Michael DiPuppo failed to carry out supervisory responsibilities to ensure that new account forms and annuity applications documents that Robert DiPuppo and other registered representatives in his branch submitted were accurate

Michael DiPuppo: Fined $15,000; Suspended 90 days in all capacities

Robert DiPuppo: Fined $10,000; Suspended 30 days in all capacities

Tags: Variable Annuity  Supervision