John Charles Piccarreto Jr., of Orrville, Ohio, a stockbroker formerly registered with First American Securities, Inc., has been fined $15,000.00 and suspended for two years from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he engaged in private securities transactions without ever having apprised his firm about his activities. Letter of Acceptance, Waiver and Consent, No. 2016049059201 (June 20, 2017).
According to the AWC, Piccarreto became employed with an entity, LG, during the period that he was associated with First American Securities. Apparently, LG was partially owned by CP – the partial owner of First American Securities’ holding company. The AWC stated that Piccarreto was tasked by LG with providing service based assistance to customers of CP.
The AWC stated that in 2013, CP and Piccarreto met with prospective investors to discuss a PREOF Offering – a private and unregistered investment. Subsequently, from 2014 to 2015, Piccarreto facilitated forty additional meetings with prospective investors, resulting in twenty investors making contributions that ranged from $20,000.00 to $75,000.00. Evidently, the paperwork that customers completed in reference to the PREOF Offering was administered by Piccarreto, and he facilitated the transactions while serving as the customers’ contact person. Piccarreto’s activities apparently resulted in a $500.00 weekly payment from LG.
The AWC stated that Piccarreto was required to provide First American Securities with notification concerning the securities transactions he effected outside their auspices; the activities were only permitted if approved by the firm in writing. Apparently, no information concerning Piccarreto’s private securities transactions involving the PREOF Offering was ever furnished to the firm for review and approval. FINRA found that Piccarreto’s conduct in this regard was violative of FINRA Rule 2010 and NASD Rule 3040.
Moreover, the AWC revealed that Piccarreto was investigated by FINRA in August of 2015 in reference to his alleged misconduct concerning the PREOF Offering. Apparently, Piccarreto never informed FINRA of his involvement in the PREOF Offering and even indicated to FINRA that he had minimal information about the companies and individuals who were connected to the Offering.
Piccarreto was subsequently called upon by FINRA to provide its staff with recorded testimony after his selling away activities were suspected by the regulator. Critically, Piccarreto conveyed to FINRA in November of 2016 that he consulted with forty investors and facilitated the transactions; the type of information that FINRA previously inquired about and which Piccarreto never provided upon testifying in August of 2015. FINRA found that Piccarreto’s conduct, which amounted to misleading FINRA personnel in its investigation into his misconduct, was violative of FINRA Rule 2010 and 8210.
Piccarreto’s registration with First American Securities, Inc. was terminated on July 22, 2015. The firm was later expelled by FINRA on March 2, 2017.
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