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FINRA Bars Broker Over Private Securities Transactions

Former broker Brian Smit entered a Letter of Acceptance, Waiver, and Consent, accepting a bar from being associated with any FINRA member in any capacity over engaging in unapproved private securities transaction in violation of his firm's policy. Smit entered the securities industry in April 2010, when he became associated with LPL Financial, LLC and registered with FINRA as a General Securities Representative. On August 24, 2015, LPL filed a Uniform Termination Notice for Securities Industry Registration, also known as a Form U-5, disclosing that Smit's association with LPL had been terminated on August 3, 2015 as a result of participating in unapproved private securities transactions in violation of LPL's policy. In February 2016, FINRA requested that Smit appear and provide on-the-record testimony related to allegations he participated in an unapproved private securities transaction. Smit refused to provide said testimony, violating FINA Rules 8210 and 2010. The nature of Smit's private transactions is presently unclear. According to [...]

By |June 14th, 2016|FINRA, Press Releases & News|
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Nebraska Advisor Accused of $1M Fraud, Commits Suicide

Jerome "Joe" Bonnett, a longtime financial advisor from Omaha, Nebraska who was accused by state officials of misappropriating over $1.35 million of client funds, has committed suicide. Bonnett operated the Bonnett Wealth Management investment firms. Two Nebraska law enforcement officials familiar with the two month investigation stated that Bonnett's clients have lost as much as $2 million. The FBI is also involved in the investigation. The allegations, which span at least nine years, have “all the makings of a Ponzi scheme,” officials said. Bonnett had been charged with two felonies: first-degree forgery and a fraudulent insurance charge, Douglas County Attorney Don Kleine said. Kleine also stated he filed the initial charges to try to ensure that Bonnett remained in the Omaha area. Prosecutors said they asked a judge to set “significantly high” bail. The judge set Bonnett’s bail at $100,000 and ordered him to surrender his passport. He paid $10,000 — 10 percent of the bail amount — and [...]

By |June 10th, 2016|Fraud, Press Releases & News|
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FINRA Bars Broker For Borrowing Client Funds

FINRA has barred Christopher Tolmacs of Portage, Michigan, alleging that the broker borrowed client funds.  The providing of loans or selling of promissory notes and other investments outside of a brokerage firm constitutes impermissible private securities transactions, a practice called "selling away." According to FINRA, Tolmacs consented sanctions in the form of a permanent bar because he failed to provide documents and information requested by FINRA during the course their investigation into allegations that he borrowed funds from multiple customers. At this time it unclear the nature and scope of Tolmacs’ outside business activities and private securities transactions.  However, according to Tolmacs’ public records his outside business activities includes Harbinger Financial Group, Inc., listed as an insurance agency, and Harbinger Asset Management, Inc., which is listed as a registered investment advisory firm.  Many times, brokers sell promissory notes and other investments through side businesses as accountants, lawyers, or insurance agents to clients of those side practices. In addition, Tolmacs has been [...]

By |June 9th, 2016|FINRA, Press Releases & News|
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Oppenheimer & Co. To Pay $2.9M For ETF Sales

FINRA fined Oppenheimer & Co. Inc. $2.25 million and ordered the firm to pay over $716,000 to harmed clients for selling leveraged, inverse and inverse-leveraged exchange-traded funds without reasonable supervision as well as for soliciting unsuitable non-traditional ETFs. Over 30,000 non-traditional ETF transactions, totaling about $1.7 billion for customers, were processed by Oppenheimer representatives from August 2009 through September 2013, according to FINRA. Only two months prior to this activity FINRA advised broker-dealers of the risks and natural complexities of particular non-traditional ETFs through it Regulatory Notice 09-31. Subsequently, the firm instituted policies in August 2009 to stop its representatives from soliciting non-traditional ETFs to retail customers. The firm also prohibited representatives from buying ETFs unless the client matched particular criteria, including having over $500,000 in liquid assets. Even still, representatives continued to solicit retail customers to purchase non-traditional ETFs and to execute unsolicited non-traditional ETF transactions even though the customers did not meet the criteria. "Written [...]

By |June 8th, 2016|FINRA, Press Releases & News|
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