Individuals Barred by FINRA in June 2018

FINRA reported in August 2018 that it barred a total of 21 brokers and advisors from working in the securities industry in June 2018. Below we have listed the names of each of these brokers, and have provided the information from FINRA concerning the circumstances of each broker’s dismissal.

If you have ever invested money with any of these individuals, please don’t hesitate to contact our Firm for a free consultation. If your broker or investment advisor’s misconduct caused substantial losses to your investment accounts, we may be able to help you recover compensation.

List of Brokers Barred by FINRA, August 2018

Donnell Noah Bowen (CRD #5641822, Ashburn, Virginia) June 1, 2018 – An AWC was issued in which Bowen was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Bowen consented to the sanction and to the entry of findings that he failed to provide FINRA with requested documents and information, and appear for on-the-record testimony, related to being under investigation at the time of his resignation from his former member firm for allegations of forgery of client signatures on non-variable insurance documents. (FINRA Case #2017052930501)

William David Nelson (CRD #2734324, South Ozone Park, New York) June 1, 2018 – An AWC was issued in which Nelson was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Nelson consented to the sanction and to the entry of findings that he refused to appear and provide FINRA with testimony in connection with its investigation of allegations that he engaged in unsuitable and excessive trading in a customer’s account. (FINRA Case #2017052865201)

Christopher Todd Wendel (CRD #1930870, Celina, Ohio) June 1, 2018 – An AWC was issued in which Wendel was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Wendel consented to the sanction and to the entry of findings that he provided a false declaration and false on-the-record testimony to FINRA, and that he engaged in private securities transactions without providing notice to his member firm or obtaining the firm’s approval prior to participating in these transactions. The findings stated that Wendel solicited investors to purchase promissory notes in a purported real-estate investment fund. Ultimately, Wendel sold $343,500 in promissory notes to individuals and received more than $10,000 in commissions in connection with these transactions. The findings also stated that in response to a FINRA request for information, Wendel provided a signed declaration falsely stating that his participation in the sale of a promissory note occurred after his association with the firm ceased. Later, during Wendel’s on-the-record testimony, he provided false testimony to the same effect. (FINRA Case #2017055476801)

James Patrick Acosta (CRD #4440729, Belmar, New Jersey) June 4, 2018 – An AWC was issued in which Acosta was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Acosta consented to the sanction and to the entry of findings that he failed to appear and provide FINRA with requested on-the-record testimony related to his termination from his member firm. (FINRA Case #2016050802201)

Bradley Everett Gardner (CRD #4423724, Fort Bragg, California) June 4, 2018 – An AWC was issued in which Gardner was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Gardner consented to the sanction and to the entry of findings that he converted his elderly member firm customer’s funds for his personal expenses. The findings stated that Gardner told the elderly customer that she could pre-pay the fees associated with her advisory firm accounts at a discount by writing a check made payable to him, and that he would then “turn off’ the fees associated with her advisory firm accounts until later. Gardner accepted a personal check in the amount of $7,400 from the elderly customer, who believed she was pre-paying her advisory account fees. Gardner deposited the check into his personal bank account and used the funds to pay for his personal expenses. However, the firm continued to charge the customer the fees associated with her advisory firm accounts. When the firm discovered Gardner’s misconduct, he reimbursed the customer the $7,400. The firm’s WSPs prohibited registered representatives from accepting a check from a firm customer and made payable to them directly. The firm’s WSPs further prohibited its representatives from taking custody, control or possession of any customer funds outside the parameters of their firm practice, and from misusing or misdirecting customer funds. (FINRA Case #2017055975701)

James Edward Lyons (CRD #1020397, Shreveport, Louisiana) June 4, 2018 – An AWC was issued in which Lyons was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Lyons consented to the sanction and to the entry of findings that he refused to appear for FINRA on-the-record testimony. (FINRA Case #2017054358101)

John Douglas Wade (CRD #4486552, Placentia, California) June 4, 2018 – An AWC was issued in which Wade was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Wade consented to the sanction and to the entry of findings that he converted funds totaling $105,712.18 from his member firm’s elderly customers without authorization. The findings stated that Wade electronically transferred, without authorization, $47,570.47 from one of the elderly customers’ checking account (at a bank affiliated with the firm) to Wade’s own mortgage account. Wade similarly used funds from another elderly customer to pay his own mortgage. Wade had this customer withdraw funds from his firm account via third-party checks, in amounts totaling $51,141.71, and write a check in the amount of $7,000 from his checking account (at a bank affiliated with the firm), ostensibly to invest in real estate investment trusts (REITs). Wade did not use those funds for their intended purpose, to invest in REITs for the customer. Rather, Wade used those checks to pay his own mortgage. (FINRA Case #2018058354101)

Ruben Gerardo Aleman Escalante (CRD #6732188, San Diego, California) June 5, 2018 – An AWC was issued in which Aleman Escalante was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Aleman Escalante consented to the sanction and to the entry of findings that while registered with a member firm, and dually employed as a personal banker with the firm’s affiliate bank, he converted $800 from an bank customer by using the customer’s bank debit card to withdraw the funds without the customer’s knowledge or approval. (FINRA Case #2017055328401)

Sean Aaron Brady (CRD #4365173, St. Louis, Missouri) June 8, 2018 – An AWC was issued in which Brady was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Brady consented to the sanction and to the entry of findings that he failed to provide FINRA with any of the information or documents requested during the course of an ongoing examination into possible sales practice violations committed by Brady while registered with a FINRA member firm. (FINRA Case #2017055941601)

Harold Lee Connell (CRD #1482623, Pinecrest, Florida) June 12, 2018 – An AWC was issued in which Connell was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Connell consented to the sanction and to the entry of findings that he willfully violated Section 10(b) of the Exchange Act and Rule 10b-5, and FINRA Rules 2010 and 2020 by participating in the sale of three unregistered Regulation D offerings through misrepresentations and omissions. The findings stated that Connell and others at his member firm raised over $4.5 million from individual investors in connection with the sale of the three unregistered Regulation D offerings. The private placement memorandums (PPMs) for the three offerings provided that investors’ funds would be used to make investments in a variety of companies. However, the first offering was invested 85 percent in one penny stock company. The other two offerings were primarily undisclosed self-offerings. Investors’ funds were transferred to the firm’s holding company, and from there, to the firm. The third offering’s PPM did not disclose that the companies that received their funds, the firm and its holding company, were deeply in debt. The third offering’s PPM also did not disclose that investor funds would be used to pay non-firm expenses and money owed to prior offering investors. None of the investors recouped any of their principal investments. The findings also stated that Connell sold the offerings without a reasonable basis to believe that they were suitable for any investor. The first offering was not suitable for any investors because appropriate due diligence was not performed on the product. The second and third offerings were not suitable for any investors because they raised money for the firm’s holding company and the firm. Also, contrary to the representations in the second and third offerings’ PPMs, the offerings’ funds were not invested in a diverse basket of investments. Connell, as the chief executive officer (CEO), president, principal supervisor and owner of the firm should not have permitted the marketing or sale of these products. The findings also included that Connell failed to reasonably supervise two registered representatives and an associated person involved in the sales of these products and the management of the funds obtained from the customers. Connell was required to investigate red flags and act upon the results of such an investigation. The two representatives had extensive contacts with their customers in Spanish. In fact, they and most of their investors were native Spanish speakers. Connell did not speak or understand Spanish. Nevertheless, Connell did not obtain translations of correspondence between the firm representatives and the customers, nor did he participate, with a translator, in any discussions with the Spanish-speaking customers at the point of sale. The associated person was not licensed by FINRA. Despite the associated person’s dual role as co-manager of the first offering and manager of the other two on the one hand, and as an associated person of the firm on the other hand, Connell did not take effective action to ensure that he did not engage in activities requiring registration. In addition, Connell allowed one of the representatives to hold himself out as a director of the firm’s Latin American business and to supervise registered representatives when Connell knew that he did not have a General Securities Principal license. (FINRA Case #2016051493702)

Alexis Lertora (CRD #4821845, Lima, Peru) June 12, 2018 – An AWC was issued in which Lertora was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Lertora consented to the sanction and to the entry of findings that he made material misstatements and omissions to his customers in soliciting an unregistered offering and promissory notes he sold to customers. The findings stated that Lertora sold the unregistered offering issued by a company affiliated with his member firm to customers located in Lima, Peru. The customers invested a total of $245,000 in the offering. Lertora also sold promissory notes issued by his firm’s holding company to other Peruvian customers. They invested a total of $73,000 in the notes. The findings also stated that Lertora did not engage in reasonable due diligence for these investments and had no reasonable basis to believe that the offering and notes were suitable for any customer. The findings also included that the investments were not suitable for the particular customers who purchased them, given their investment profiles and conservative objectives. FINRA found that Lertora circulated marketing material for the offering that contained misrepresentations, omitted material risks and did not form a sound basis for evaluating the investment. Customers purchased the offering after receiving the marketing material from Lertora that was not fair and balanced and was highly misleading. (FINRA Case #2016051493703)

Justin Travis Mair (CRD #5143515, Layton, Utah) June 13, 2018 – An AWC was issued in which Mair was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Mair consented to the sanction and to the entry of findings that he converted approximately $722 from his member firm’s customer by obtaining the customer’s account number, setting up and making unauthorized ACH transfers from the account to pay his personal electric bills. (FINRA Case #2016051547601)

Terry Lee McCoy (CRD #1476696, New Port Richey, Florida) June 15, 2018 – An AWC was issued in which McCoy was assessed a deferred fine of $75,000 and barred from association with any FINRA member in any principal capacity. Without admitting or denying the findings, McCoy consented to the sanctions and to the entry of findings that he failed to appropriately supervise the sales practices of his member firm’s registered representatives. The findings stated that the representatives engaged in excessive and unsuitable trading and used discretion without proper authorization in a customer’s accounts who was 79-years-old and suffered from severe physical disabilities. McCoy was branch manager of the firm’s Palm Harbor, Florida branch. Under the firm’s branch managers supervisory manual, McCoy was responsible for supervising the business conducted in his branch and the activities of each employee (registered or unregistered) working in his branch. The representatives were under McCoy’s supervision. As a result of the excessive trading, the customer’s accounts generated commissions of over $9 million. McCoy’s supervision of the representatives and the transactions in the accounts were  unreasonable in that he failed to adequately follow-up on multiple red flags. McCoy failed to identify excessive and unsuitable trading activity in the customer’s accounts. McCoy failed to detect the use of discretion by these representatives in the accounts, despite his routine meetings with the customer. (FINRA Case #2016049321301)

Dennis Mitchell Farrah (CRD #2703960, Centennial, Colorado) June 18, 2018 – An AWC was issued in which Farrah was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Farrah consented to the sanction and to the entry of findings that he refused to produce FINRA requested documents and information during its investigation into the allegations referenced in an amended Uniform Termination Notice for Securities Industry Registration (Form U5) that Farrah had sold securities away from his member firm without the firm’s knowledge or approval. (FINRA Case #2018057111801)

Michael Todd Clements (CRD #1702071, Wellington, Florida) June 19, 2018 – A NAC decision became final in which Clements was barred from association with any FINRA member in all capacities, barred from association with any FINRA member in any principal or supervisory capacity and ordered to pay a total of $350,000, plus prejudgment interest, in restitution to customers. The NAC modified the sanctions to order restitution instead of rescission and to impose the bar in any principal or supervisory capacity, and affirmed the liability findings imposed by OHO. The sanctions were based on findings that Clements made material misstatements and omissions of material fact in connection with the sale of his member firm’s equity interests and failed to reasonably supervise the firm’s, and a holding company’s, capital raising efforts. The findings stated that Clements committed fraud when he recklessly made material misstatements and omitted material facts in connection with the sale of the equity’s interests to customer. Clements’ conduct was in willful violation of Section 10(b) of the Exchange Act and Rule 10b-5, and in violation of FINRA Rule 2020. The findings also stated that Clements failed to reasonably supervise the firm’s and holding company’s capital raising efforts. Clements took no steps to ensure that two registered representatives disclosed the firm’s financial condition to customers. Clements failed to detect or ignore red flags that a representative was conducting an equity offering without approval and misusing proceeds to pay for personal expenses. Among other things, Clements failed to conduct due diligence before the offering and to audit the holding company’s use of the proceeds raised in its offerings. Clements also took no steps to ensure that his firm was complying with the disclosure obligations. (FINRA Case #2015044960501)

Joseph Kortei Clottey (CRD #2764976, Lawrenceville, Georgia) June 19, 2018 – An AWC was issued in which Clottey was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Clottey consented to the sanction and to the entry of findings that he failed to cooperate with FINRA’s requests for on-the-record testimony. (FINRA Case #2016050900001) Steven

Roland Knuttila (CRD #3039112, Perham, Minnesota) June 19, 2018 – An AWC was issued in which Knuttila was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Knuttila consented to the sanction and to the entry of findings that he refused to appear for FINRA on-the-record testimony relating to an investigation into allegations that Knuttila made unsuitable recommendations to customers. (FINRA Case #2017052705601)

Kyusun Kim (CRD #2864085, San Diego, California) June 26, 2018 – An AWC was issued in which Kim was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Kim consented to the sanction and to the entry of findings that he made unsuitable recommendations to numerous senior customers, who were retiring or had retired, that they concentrate their retirement assets and liquid net worth in speculative and illiquid securities. The findings stated that many of the customers had little or no investment experience other than their 401(k) and pension plans and had never purchased alternative investments. Kim’s recommendations were unsuitable for these customers because the speculative and illiquid nature of these investments was inconsistent with the customers’ moderate or conservative investment objectives and risk tolerances. In addition, Kim’s recommendations resulted in an undue concentration of the customers’ retirement assets and liquid net worth in speculative and illiquid investments. Kim failed to disclose to his customers the risks associated with these products, including that the securities were speculative and illiquid. As a result of these recommendations, Kim’s customers suffered substantial losses. The findings also stated that Kim’s member firm’s procedures limited the amount of a customer’s net worth that could be concentrated in alternative investments. In order to circumvent these procedures, Kim entered inaccurate and inflated net worth, liquid net worth and investment experience figures on the new account forms and other documents for certain customers so that they appeared to be eligible to purchase certain speculative investments. (FINRA Case #2017052705001)

Jason Taek Chong (CRD #6061308, Mercer Island, Washington) June 28, 2018 – An AWC was issued in which Chong was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Chong consented to the sanction and to the entry of findings that he failed to provide information requested by FINRA in connection with its investigation of Chong’s voluntary termination from his member firm while he was under internal review for commission amounts associated with large institutional trades. (FINRA Case #2018058621101)

Taek Man Chong (CRD #1551473, Mercer Island, Washington) June 28, 2018 – An AWC was issued in which Chong was barred from association with any FINRA member in all capacities. Without admitting or denying the findings, Chong consented to the sanction and to the entry of findings that he failed to provide information requested by FINRA in connection with its investigation of Chong’s voluntary termination from his member firm while he was under internal review for commission amounts associated with large institutional trades. (FINRA Case #2018058621901)

Ellen Vratoric (CRD #2345611, McKees Rocks, Pennsylvania) June 29, 2018 – An Office of Hearing Officers (OHO) decision became final in which Vratoric was barred from association with any FINRA member in all capacities. The sanction was based on findings that Vratoric failed twice to appear and provide sworn testimony at an on-the-record interview in connection with FINRA’s review of allegations contained in a Form U5 and subsequent amendments filed by her member firm, and after additional customers complained about her sales of variable and fixed annuities. (FINRA Case #2016049420501)