Legal Matters

The Financial Industry Regulatory Authority (“FINRA”) has suspended broker Steve Baptist for 30 days and imposed a monetary sanction against him based on FINRA’s findings that Baptist placed six trades in the accounts of two customers who were deceased at the time of the trades. The trading activity occurred in March, November, and December 2017, while Baptist was employed by Joseph Gunnar & Co., LLC in its New York, New York branch location. Joseph Gunnar also fired Baptist for the unauthorized trades. FINRA found that Baptist executed two trades in March 2017 in the account of one client who had been deceased for over a week. Likewise, Baptist executed two trades three weeks after another client’s death and another two trades five weeks later. FINRA found Baptist’s unauthorized trading to be in violation of FINRA’s Rule 2010, which requires brokerage firms and stockbrokers to observe high standards of commercial honor and just and equitable principals of trade. FINRA suspended Baptist for [...]

Robert H. Shapiro, the former CEO of the Woodbridge Group of Companies, pleaded guilty to running a $1.3 billion Ponzi scheme that defrauded over 7,000 investors. The Woodbridge Group of Companies has appeared frequently in this blog space related to the ongoing investigations and penalties involving its vast Ponzi scheme operation. Earlier this year, a federal court judge in Florida ordered the Woodbridge Group and Shapiro, to pay a combined penalty of over $1 billion dollars as a result of the scheme. Woodbridge Group must pay $892 million and Shapiro must pay a $100 million civil penalty and disgorge more than $20 million in ill-gotten gains and interest. The Securities and Exchange Commission had brought charges against the company in December 2017, alleging that the company had spearheaded massive Ponzi scheme which defrauded over 8,400 investors nationwide, many of whom were seniors. Shapiro pleaded guilty to conspiracy and tax evasion and could serve up to 25 years in prison. Shapiro [...]

Hector May, the head of suburban New York registered investment advisory firm Executive Compensation Planners, has been sentenced to 13 years in prison and ordered to pay $8.4 million in restitution following a plea of guilty in an $11.5 million Ponzi scheme case. May, of Orangeburg, NY, pleaded guilty last December to allegations that he induced more than 15 clients to entrust their money for securities investments under the false pretense that May would use the money to purchase bonds and other investments on their behalf. Instead, he used the money for personal and business expenses and to pay other investors. May pleaded guilty to wire fraud and investment fraud. A federal judge sentenced May to a prison sentence and to pay restitution to his victims but did not add a separate fine, stating that all of May’s assets should be used to compensate the victims. If you or someone you know has lost money as a result of an [...]

The Financial Industry Regulatory Authority (“FINRA”) has imposed a permanent ban against former Morgan Stanley and Wells Fargo broker Robert Frederico Montes, who most recently worked in Morgan Stanley’s Palm Harbor, Florida branch office. According to FINRA’s Acceptance, Waiver and Consent letter, FINRA received a tip in early 2019 that Montes may have misused the assets of an elderly customer. FINRA opened an inquiry on the allegations and sent Montes a request for documents and information due by July 1, 2019. In a telephone call with FINRA staff on July 2, 2019, Montes acknowledged receipt of FINRA’s request for documents and information but affirmed that he would not cooperate with the investigation and would not provide the requested documentation or information. Montes’s refusal to cooperate with FINRA’s investigation is a violation of FINRA’s rules and subjects him to FINRA sanctions. FINRA has entered a permanent ban which prohibits Montes from associating with any FINRA member firm in any capacity. According [...]