Rukujzo participated in the negotiation and consummation of an Asset Purchase Agreement transaction, involving
The transaction resulted in the transfer from the other FINRA member of multiple customer mutual fund positions for which Rukujzo’s firm had become the dealer of record to the dominion and control of his firm’s customer (the entity), which exposed customers’ accounts to losses as a result of the entity’s speculative margin trading. Rukujzo’s firm facilitated the transfer of certain positions held directly at mutual fund companies to an omnibus margin account held and maintained at the firm’s clearing firm in the name of the entity, for which the firm was the broker-dealer of record. The Firm advised its clearing firm that the customers had authorized the use of their mutual fund assets as collateral when in fact, the customers did not sign any margin authorization forms, and information sent to the customers did not mention a margin account, the use of margin in investment strategies, or the use of the customer’s assets as collateral to support margin trading in the omnibus account.
Rukujzo allowed an unregistered person to function as a representative and the firm’s principal without being registered. Under Rukujzo’s direction and control, his firm engaged in the change of dealer of record designation without the customer’s authorization, and allowed his firm to participate in a transaction that he knew, or should have known, required approval from FINRA, and that approval was neither requested nor obtained.