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FINRA SANCTIONS FIFTH THIRD SECURITIES, INC. OVER VARIABLE ANNUITY EXCHANGES

The Financial Industry Regulatory Authority (“FINRA”) has announced a fine of $4 million and required an additional $2 million in restitutionary damages from Fifth Third Securities, Inc. for its failures to consider and accurately describe the costs and benefits of variable annuity exchanges, and for recommending variable annuity exchanges without a reasonable basis to believe the exchanges were suitable. According to the FINRA release, Fifth Third’s principals approved approximately 92 percent of the variable annuity exchange applications submitted to them for review, even though such exchanges are complex investments with costs that may outweigh the potential benefits of the transaction. In a random sample of Fifth Third’s variable annuity exchanges from 2013 to 2015, FINRA found that Fifth Third had misstated or omitted at least one material fact related to the costs or benefits of the exchange in approximately 77 percent of the reviewed transactions. Variable annuities are complex investments that are high-cost vehicles with a handful of narrow benefits [...]

By |May 8th, 2018|SEC|
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Demitrios Hallas Accused By SEC Of Selling Unsuitable Investments

The SEC accused former broker Demitrios Hallas with trading leveraged Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs) in clients' accounts and swindling $170,000 from one of his clients. The Commission claims he trade one hundred seventy-nine daily leveraged ETFs and ETNs in client accounts from September 2014 to October 2015, creating $128,000 in fees and commissions. At the same time, his clients lost around $150,000. It also states that he used the swindled cash to pay for rent, restaurant tabs, credit card bills, and student loan payments. The complaint alleges that Hallas systematically disregarded his client's objectives and continued to trade in high risk investments that were not consistent with their goals or risk tolerances. The complaint also states that the customers were unsophisticated, having little to no investing experience and modest assets. One such client entrusted Demitrios Hallas with his retirement from working as a baker, taxi driver and garbage truck driver. A second was a retired [...]

By |April 26th, 2017|SEC|
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Robert Tricarico Sentenced To 3.5 Years In Prison For Client Theft

Robert Tricarico, a former LPL broker, pleaded guilty to stealing $1.2 million from a client by a federal court in Hartford, Connecticut and was sentenced to forty-one (41) months in jail. The Court also ordered him to pay restitution. Tricarico started his career as a broker in 1992 and spent ten years with Merrill Lynch. He was most recently registered with LPL. He worked for LPL for three years prior to being barred from the industry by FINRA in April 2015. According to document filed with the Court and in-person testimony, between January 2010 and June 2013, Robert Tricarico was a financial advisor for an elderly and infirmed victim who had substantial assets. He allegedly took over $1.1 million from the client by writing a number of checks to himself or for his benefit without the client's permission, according to the SEC, who has also barred him from the industry. Additionally, Tricarico liquidated the client's coin collection and took checks [...]

By |April 13th, 2017|Fraud, FINRA, SEC|
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Craig David Dima Barred By FINRA

Craig David Dima, an ex-registered representative with K.C. Ward Financial in Ronkonkoma, New York, was barred from the securities industry by FINRA for making unauthorized and unsuitable trades amounting to roughly $15 million in a seventy-three (73) year old retiree's account, as well as for misrepresenting the reasons for all the trades to the customer. FINRA found that on eleven different occasions, Dima sold nearly all of the client's Colgate-Palmolive stock, which he had acquired after twenty-eight (28) years of working for the company, without the customer's permission. FINRA discovered that Craig David Dima sold the stock even after the client instructed him not to, which the client considered a valuable long-term investment and reliable source of dividends. When the client asked Dima about the sales, Dima stated they were caused by a "computer glitch" or a technical error. Related to Dima's unauthorized sales and later repurchases of Colgate stock, Dima charged the client over $375,000 in mark-ups, mark-downs and [...]

By |March 2nd, 2017|FINRA, Legal Matters, Press Releases & News|
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