Martin William Pernoll, of Santa Monica, California, a stockbroker formerly registered with Bay Mutual Financial, LLC, has been fined $25,000.00 and suspended for nine months from associating with any Financial Industry Regulatory Authority (FINRA) member firm by consenting to findings that he, inter alia, executed unauthorized transactions, and failed to report customer disputes. Letter of Acceptance, Waiver and Consent, No. 2014040362101 (Oct. 16, 2017).
According to the AWC, two transactions involving the sale of mutual funds and stock from a customer’s account, totaling $59,000.00, had been executed by Pernoll where he failed to discuss the transactions with the customer beforehand. The unauthorized transactions paved the away for a fraudulent wire transfer from the customer’s account. FINRA found that Pernoll’s conduct was violative of FINRA Rule 2010.
FINRA also cited Pernoll for having failed to report customer disputes. In particular, Bay Mutual Financial LLC, and Pernoll were named in an investment related arbitration claim brought by customer DT alleging breach of contract, excessive trading, negligence, failure to supervise, and fraud. Apparently, the customer’s complaint was settled for $35,000.00 in January of 2015; yet Pernoll failed to report the complaint until September of 2015.
The AWC also referenced that the firm and Pernoll were subject of an arbitration claim filed by customers SH and LH, who requested $109,000.00 in damages based upon allegations that Pernoll effected trades in the customers’ account on an unsuitable and unauthorized basis, churned the customer’s account, and made misrepresentations to the customer regarding mutual funds and equities; the customer also alleged that Bay Mutual failed to supervise Pernoll’s activities. FINRA Arbitration No. 13-00636 (May 1, 2013). Despite having been served with the arbitration claim in June of 2013, Pernoll deliberately failed to report it until April of 2015.
Another claim was pursued by customers RET and AJB alleging that the firm and Pernoll were liable for unauthorized trading, unsuitable investments, and churning of the customer’s account. FINRA Arbitration No. 14-01275 (Apr. 21, 2014). Apparently, it was not until nearly a year later that Pernoll disclosed it.
FINRA Public Disclosure reveals that Pernoll’s registration with Bay Mutual Financial was terminated on January 29, 2016.
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