Brian Simone, a disgraced lawyer and former stockbroker, has been banned from the securities business after he falsified paperwork and failed to reveal that he had been disbarred in Massachusetts after allegations of forgery, fraud, misappropriation of funds, and misrepresentation.
Brian Simone Barred From Association from any FINRA member
On Oct. 6, the Financial Industry Regulatory Authority, or FINRA, executed an order accepting an offer of settlement submitted by Simone on Sept. 26, wherein the former lawyer agreed to be barred from associating with any FINRA member in any capacity. As a term of the settlement, Simone did not deny nor admit the allegations
The falsified and misleading paperwork in question was filed while Simone worked for two large broker-dealers. Beginning in August 2007, Simone had registered with FINRA as a general securities representative through Morgan Stanley & Co. Inc. until early November 2008. Thereafter he was registered in the same capacity with Banc of America Investment Services, Inc. for a short time.
Simone worked for Salomon Whitney LLC After Pending Fraud Proceedings
Bizarrely, considering the fraud allegations and the proceedings pending against Simone, he then went to work for Salomon Whitney LLC from December 2008 until August 15, 2011, according to a FINRA letter of acceptance, waiver and consent. This AWC, accepted by FINRA on Oct. 14, also barred Simone from associating with any FINRA member in any capacity for failure to show up at a hearing.
Forgery, Fraud and Misappropriation
According to allegations set out in the FINRA order, Simone forged and then notarized the signatures of real property owners to a deed transferring title and then recorded the deed, all without the sellers’ knowledge or consent. Simone also allegedly misappropriated about $270,000 from the buyers of the property.
The Supreme Judicial Court of Suffolk County in Massachusetts entered a “Judgment of Disbarment” against Simone on Oct. 30, 2007, although it was effected through a voluntarily proffered “Affidavit of Resignation,” which operates somewhat like a settlement. Simone’s disbarment was made retroactive to July 2006, the date of his original suspension. He is not eligible to seek reinstate to any bar before July 2014, and he can never seek to practice in Massachusetts.
Subsequent to these events, FINRA alleged that Simone willfully failed to disclose material facts and provided false and misleading information on required forms that he filed with Morgan Stanley and Banc of America Investments from June 2007 through December 2008 regarding the revocation of his authorization to act as an attorney, the FINRA order says.
In addition, Simone provided false information on his employment applications, hiding the fact that he was unemployed for six-months after he was suspended from legal practice.
Also, in December 2008, Simone created and submitted, through his employer, Banc of America Investments, a false written statement to the Massachusetts Securities Division concerning the sanctions meted out by the Massachusetts court, according to the FINRA order.
Simone’s conduct violated National Association of Securities Dealers Conduct Rule 2110 and IM-1000-1 for Willful Failure to Disclose Material Information on a Form U4, and FINRA Rule 2010 on Standards of Commercial Honor and Principles of Trade. A Form U4 must be submitted whenever a stockbroker wants to register or to transfer to another broker-dealer.
For example, in June 2007, in the Form U4 he submitted to Morgan Stanley, Simone falsely answered “no” to a question that asks, “Have you ever had an authorization to act as an attorney, accountant, or federal contractor that was revoked or suspended.”
On his employment application with Morgan Stanley, Simone falsely indicated that he had been working at his own law office from Jan. 1, 1997 to Dec. 31, 2006, and that, on Jan. 2, 2007, he started work as a loan officer for a mortgage company. His law practice had closed six months before he claimed, however, due to the suspension of his law license. He also stated on the employment application that he closed his law office because of the slow down in the real estate markets.
Moreover, Simone failed to amend his Form U4, as required by FINRA By-Laws, after the Board of Bar Overseers in Massachusetts issued a “Statement of Disciplinary Charges” against him as the process moved from a Petition for Suspension to a Judgment of Disbarment, the FINRA order says.
Statement of Disciplinary Charges
The Statement of Disciplinary Charges added numerous allegations against Simone, including that he misappropriated funds from the property sale by transferring a portion from his business account into a personal savings account and then using the funds for personal purposes, and that he engaged in misconduct involving dishonesty, fraud, deceit, misrepresentation and the failure to account for fiduciary funds.
Shortly after the Statement of Charges was issued, Simone signed his Affidavit of Resignation, but he failed to amend his Form U4 at Morgan Stanley to disclose the fact that he had been disbarred.
Thereafter, Simone provided the same kind of false employment history information on his application for Banc of America Investments as he did on his application for Morgan Stanley. While he answered “yes” this time when asked if he ever had an authorization to act as an attorney “revoked or suspended,” he presented the information in such a way as to imply it would be a short-lived situation. He also withheld information that would enable his would-be employer to investigate the incident, as described in the FINRA order.
In fact, Simone listed the matter as “settled,” and failed to disclose the Judgment of Disbarment.
Finally, on Dec. 15, 2008, Simone submitted a false written statement to the Massachusetts Securities Division through Banc of America Investments, his employer, that said his client’s husband had given a forged quitclaim deed to Simone, and that only later had Simone discovered it was forged. In truth, Simone had forged the signatures, notarized the signatures, and filed the deed to be recorded, the FINRA order says.
As noted previously, Simone eventually began working for Salomon Whitney LLC. While there, he was involved in one customer dispute for “unsuitable concentration,” in exchanged traded funds, according to FINRA public disclosure records. The alleged damages were $214,000. The dispute settled in June for $102,000, with $50,000 coming from Simone himself. Simone admitted no liability as a term of the settlement.
Guiliano Law Firm
The practice of Nicholas J. Guiliano, Esq., and The Guiliano Law Firm, P.C., is limited to the representation of investors in claims for fraud in connection with the sale of securities, the sale or recommendation of excessively risky or unsuitable securities, breach of fiduciary duty, and the failure to supervise. We accept representation on a contingent fee basis, meaning there is no cost to unless we make a recovery for you, and there is never any charge for a consultation or an evaluation of your claim. For more information contact us at (877) SEC-ATTY.