Mark Douglas Weindling, a former JHS Capital Advisors, LLC registered representative, was permanently barred from associating with any FINRA member in any capacity after consenting to FINRA findings that he failed to provide information and documents pursuant to a FINRA investigation into allegations of unauthorized transactions. FINRA Acceptance, Waiver, and Consent No. 2014041259001 (Apr. 22, 2015).
According to the Letter of Acceptance, Waiver, and Consent (“AWC”), FINRA launched an investigation into Weindling as a result of the information provided to FINRA from JHS via a Form U5 upon terminating Weindling’s employment on May 16, 2014. The AWC indicated that JHS reported that Weindling had effected transactions with an account of one of the firm’s deceased clients and that Weindling was aware of 2 journal requests that contained the forged signature of a deceased client.
The AWC indicated that on January 27, 2015, FINRA, acting pursuant to Rule 8210, requested from Weindling’s counsel that he provide information and documentation on February 13, 2015, to assist FINRA in their investigation. According to the AWC, on February 11, 2015, FINRA had received a letter from Weindling’s counsel indicating that Weindling was not going to provide FINRA’s requested information and documentation at any point. FINRA reportedly attempted to retrieve such documents by getting directly in touch with Weindling after Weindling’s counsel indicated that he was no longer representing Weindling. Weindling, via a telephone conversation with FINRA staff, indicated he had received FINRA’s requests but would not provide any information and documentation at any point. Weindling was consequently barred by FINRA as a result.
FINRA registered representatives like Weindling who do not cooperate with FINRA’s investigations often face a permanent bar from practicing in the securities industry as such lack of cooperation violates FINRA’s Rule 8210 – requiring that no member or person shall fail to provide information or testimony or permit an inspection and copying of books, records, or accounts pursuant to the rule. FINRA typically accompanies a Rule 8210 violation with a Rule 2010 violation when individuals, according to FINRA, do not appear to observe high standards for commercial honor and just and just and equitable principles of trade.
Aside from the regulatory issue referred to above, public disclosure records reveal that Weindling has been subject to 1 other disclosure pertaining to a tax judgment/lien of $174,482.40 from October 3rd, 2007.
By definition, a broker is liable for making unauthorized trades without the customer’s prior authorization. Absent written discretion, it is a violation of Section 10(b) of the Exchange Act, and Rule 10b-5, as promulgated thereunder, to effect transactions in customer accounts without their prior authorization or consent.
Customers also have a duty to review securities purchase and sale confirmations and review their securities accounts. If a stockbroker has placed unauthorized transactions in a customer account, the customer under most circumstances has a duty to act, or a duty to complain, or else generally, the customer may be deemed to have ratified these transactions, with actual or imputed knowledge, by doing nothing. Under such circumstances, a customer’s damages may be limited to the time they knew or should have known about the unauthorized transactions.
However, the rules do not contemplate de facto discretion, or the acquiescence to a pattern of discretionary trading without a formal trading authority. It is an actionable violation of the rules and is generally indicative of other bad or wrongful conduct.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esq., and The Guiliano Law Group, 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 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.
Former Cetera Investment Services LLC Principal Barred by FINRA for Unauthorized Transactions
Santos, formerly a general securities principal with Cetera Investment Services, LLC, was permanently barred from associating with any FINRA member in any capacity after consenting to FINRA findings that he had falsified customers’ signatures, executed unauthorized trades, mismarked order tickets, and caused his firm’s records to be inaccurate. FINRA Letter of Acceptance, Waiver, and Consent, No. 2014041211201 (Apr. 22, 2015).
According to the Letter of Acceptance, Waiver, and Consent (“AWC”), on February 12, 2014, an imposter had hacked into client JR’s email account, where he/she then sent Santos a request via e-mail to wire funds from JR and his spouse’s brokerage account to a third party banking account. The AWC indicated that such bank account was not in JR or his spouse’s name, prompting Santos to inform the imposter that his firm would need a letter of acceptance, signed by the account owners, in order to wire the funds to the third party banking account. The AWC further indicated that after the imposter indicated that JR would not be able to provide a letter of acceptance, Santos simply acted upon the imposter’s request to wire the funds. Santos reportedly had affixed signatures of JR and his spouse to the letter of acceptance.
According to the AWC, Santos had received 9 more requests via e-mail from the imposter in order to transfer additional funds to the aforementioned third party banking account. Santos, according to the AWC, responded in the same manner as in the past, affixing signatures from JR on 10 LOA’s, while affixing the spouse’s signature to 3 of them. FINRA found that by falsifying the customers’ signatures, Santos had violated MSRB Rule G-17 and FINRA Rule 2010.
FINRA found that Santos had falsified customers’ signatures on 10 LOAs, which enabled the imposter to fraudulently execute the wire and end up misappropriating a total of $160,000 from JR and his spouse’s accounts. The AWC does indicate that the imposter was eventually discovered by the bank, and that Cetera Investment Services, LLC was able to retrieve a portion of the money from the bank. The firm, according to the AWC, reimbursed JR and spouse for the $160k loss.
In addition to the above mentioned acts, Santos had also reportedly executed 12 unauthorized sell transactions for municipal bonds and stocks in the individual and joint brokerage accounts in order to prepare for the wire transfers. Santos, according to the AWC, neither had discretion to trade in the accounts nor authorization (from his firm), yet he had received $256.69 in total commissions for such transactions. The AWC indicated that Santos had actually marked the order tickets as unsolicited when they were truly solicited. FINRA found this conduct to be violative of MSRB Rules G-8, G-18, and FINRA Rules 4511 and 2010.
By definition, a broker is liable for making unauthorized trades without the customer’s prior authorization. Absent written discretion, it is a violation of Section 10(b) of the Exchange Act, and Rule 10b-5, as promulgated thereunder, to effect transactions in customer accounts without their prior authorization or consent.
Customers also have a duty to review securities purchase and sale confirmations and review their securities accounts. If a stockbroker has placed unauthorized transactions in a customer account, the customer under most circumstances has a duty to act, or a duty to complain, or else generally, the customer may be deemed to have ratified these transactions, with actual or imputed knowledge, by doing nothing. Under such circumstances, a customer’s damages may be limited to the time they knew or should have known about the unauthorized transactions.
However, the rules do not contemplate de facto discretion, or the acquiescence to a pattern of discretionary trading without a formal trading authority. It is an actionable violation of the rules and is generally indicative of other bad or wrongful conduct.
Guiliano Law Group
If you have been the victim of securities fraud and you have a complaint, you should consult with an attorney. The practice of Nicholas J. Guiliano, Esq., and The Guiliano Law Group, 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 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.
