Ron Yehuda Itin, of Jersey City, New Jersey, the former president of E1 Asset Management Inc., has been suspended for three months from associating with any Financial Industry Regulatory Authority (FINRA) member in any principal capacity because Itin failed to create and maintain a supervisory system for purposes of identifying and preventing fraudulent fund transfers and identity theft. Letter of Acceptance, Waiver, and Consent No. 2019064497301 (July 12, 2024).
As the president, director, and CCO of E1 Asset Management Inc., Itin was responsible for creating and enforcing supervisory systems. However, the systems were deficient in design and execution, particularly regarding the securities broker dealer’s written supervision procedures.
According to the AWC, the issues became known when E1 Asset Management Inc. began receiving withdrawal requests and trading instructions from a customer’s email address that had been hacked. After gaining unauthorized access, those individuals sent multiple requests to liquidate securities in the customer’s joint account and then relocate most of the account’s value to external bank accounts. Itin approved request forms without requiring contact through any method other than the compromised email. He took no steps to verify the authenticity of the instructions.
The AWC stated that Itin allowed hackers to transfer nearly all the funds from the customer’s account to their controlled accounts, leading to financial loss. Additionally, Itin caused E1 Asset Management Inc. to violate SEC Regulation S-ID by failing to put in place a program to identify or detect identity theft. FINRA found that Itin violated FINRA Rules 3110 and 2010.
Itin was previously fined $5,000.00 and suspended from associating with any FINRA member firm in certain principal capacities because he failed to supervise trading. Letter of Acceptance, Waiver, and Consent No. 2010025835701 (June 5, 2015). FINRA stated that Itin did not put a reasonable supervisory system in place. Furthermore, Itin did not conduct reasonable reviews of trading aimed at stopping excessive trading in customer accounts. He also failed to document suitability reviews of leveraged exchange-traded fund transactions in customer accounts.
FINRA Public Disclosure also shows that Itin has been referenced in eleven (11) investor disputes concerning his conduct in the securities industry. On January 27, 2011, a customer initiated investment related FINRA securities arbitration claim involving Itin’s conduct was settled for $310,000.00 in damages based upon allegations that Itin failed to supervise certain representatives in connection with the sale of options, stocks, and over-the-counter equities when Itin was associated with E1 Asset Management Inc. FINRA Arbitration No. 11-00217.
Itin was also referenced in a customer initiated investment related FINRA securities arbitration claim that was settled for $230,000.00 in damages based upon allegations that Itin failed to supervise in connection with the sale of over-the-counter equities during the time that Itin was associated with E1 Asset Management Inc. FINRA Arbitration No. 11-02478 (February 13, 2013).
On January 8, 2016, a securities arbitration claim involving Itin’s conduct was settled for $21,000.00 in damages based upon allegations that Itin was negligent, committed fraud, and made the unsuitable investment recommendation of stocks. FINRA Arbitration No. 14-02830.
On June 12, 2023, a customer filed a securities arbitration claim involving Itin’s conduct in which the customer requested damages based upon alleged sales practice violations during the period that Itin was associated with E1 Asset Management Inc. FINRA Arbitration No. 23-01693.
Itin was the subject of a securities arbitration claim in which the customer was awarded $1,604,814.00 in compensatory damages because Itin and E1 Asset Management Inc. were held jointly liable for sales practice violations. FINRA Arbitration No. 22-00733 (April 3, 2024). The Statement of Claim alleged breach of fiduciary duty, negligence, fraud, and violation of federal securities laws.
Itin was associated with E1 Asset Management Inc. in Jersey City, New Jersey from September 24, 1999, to June 28, 2024.
