gavel on money

If you steal $2.3 million, it is probably best not to talk about it.
Robert P. DePalo, of Greenwich, Connecticut, a stockbroker with Arjent, LLC, was barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity in connection with a FINRA Hearing Panel Decision containing findings that DePalo obstructed a FINRA investigation into allegations that DePalo committed securities fraud. Department of Enforcement v. Robert P. DePalo, No. Robert P. DePalo (Aug 4, 2016).
According to the Decision, DePalo was initially investigated by FINRA in 2013, based on allegations that DePalo, as chief executive officer and president of Arjent LLC, was charging personal expenses to his firm. The Decision stated that FINRA also launched a 2015 investigation into whether DePalo had been charging customers with excessive commissions pertaining to equities trades, as well as whether customers’ funds were being misplaced from private placement issuers to DePalo or other companies that he had owned.
The Decision stated DePalo was served by FINRA with six letters since 2015, in which he was asked to provide recorded testimony before FINRA, per FINRA Rule 8210, in connection with the allegations. Apparently, two of the six requests pertained to FINRA’s 2013 investigation, while the remainder were associated with FINRA’s 2015 investigation into allegations of DePalo’s misconduct.
According to the Decision, in every case in which FINRA requested that DePalo provide recorded testimony, DePalo was warned that his failure to do so could result in his permanent FINRA bar. DePalo reportedly failed to respond to any of FINRA’s requests, claiming that his mental or medical status as an excuse or otherwise deciding not to show up.
Ultimately, FINRA’s Hearing Panel concluded that DePalo failed to cooperate with FINRA’s Department of Enforcement based on his refusals to allow FINRA personnel to confirm the nature of his medical conditions, or through DePalo’s seemingly limited responses to FINRA’s requests for information and documentation. As such, FINRA found that DePalo violated FINRA Rule 8210, resulting in his permanent bar.
Public disclosure records reveal that DePalo has been subject to six disclosure incidents. On January 23, 2012, the Chicago Board Options Exchange censured and fined DePalo $10,000.00 per a Decision and Order of Offer of Settlement containing findings that he improperly received funds from Arjent through accepting compensation when the firm’s capital account had a negative balance.
On May 20, 2015, the Securities and Exchange Commission named DePalo in a Complaint alleging that DePalo committed fraud. Particularly, DePalo was alleged to have misrepresented a Pangaea Trading Partner’s assets and how their funds would be utilized. DePalo was alleged to have transferred $2,300,000.00 raised in the private placement offering directly into DePalo’s own bank account, using it for his personal benefit.
Prior to FINRA’s Hearing Panel Decision, DePalo was named in a pending customer dispute on July 14, 2015, in which a claimant requested $40,000.00 in damages after alleging misconduct concerning an investment made by the claimant in Gorham Fund.
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