Marla Chidsey Roeser of Potomac Maryland is a stockbroker formerly registered with City National Securities Inc. who has been fined ten thousand dollars and suspended from associating with any Financial Industry Regulatory Authority (FINRA) member in any principal capacity based upon consenting to findings that she failed to supervise the private securities transactions and outside business activities that her subordinate stockbroker DZ engaged in while associated with the firm. Letter of Acceptance Waiver and Consent No. 2014043089903 (Jan. 25 2018).
“DZ” appears to be DAVID ROBERT ZIER. According to FINRA Records, he was terminated by City National In October 2014 and was supposedly subject to an investigation by the U.S. Securities & Exchange Commission in 2014. However, it does not appear that any formal enforcement or other action was evert taken against Mr. Zier.
Nonetheless, according to the AWC, while DZ was associated with the firm, he engaged in several outside business activities which consisted of him serving as an investment fund’s managing member. Apparently, investors contributed to the investment fund, where trades would be effected by DZ in brokerage accounts held away from City National Securities. Roeser reportedly disclosed DZ’s activities to the home office of City National Securities as well as to the firm’s parent company, and then investigated DZ’s activities internally. The AWC stated that Roeser detected that the value of investments had been misrepresented by DZ to customers so that losses of the investment fund could be concealed. Evidently, the investment fund was nowhere near the value that DZ portrayed to investors.
Apparently, Roeser was aware of DZ’s investment fund, as DZ discussed his activities relating to the investment fund with City National Securities staff as well as the registered investment advisory that DZ worked at. Apparently, DZ utilized the investment advisory to effect securities transactions and correspond with customers.
Apparently, DZ failed to provide City National Securities sufficient notice of his involvement with the investment fund. DZ also reportedly neglected to disclose his investment fund activities to FINRA. Roeser was found by FINRA to have failed to do sufficient research to assess whether the outside business activities that DZ engaged in warranted disclosure, and never prompted DZ to make the requisite disclosures to FINRA relating to his outside business activities. Consequently, the firm never conducted any evaluation about the extent of DZ’s investment fund activities.
Moreover, DZ reportedly failed to inform the firm that he engaged in private securities transactions. Evidently, he neglected to relay what his role was or identify what type of transactions were to be placed. Apparently, throughout this period, Roeser knew of individuals that contributed money to the investment fund, which included one of City National Securities’ own staff members as well as customers of the registered investment advisory. Evidently; however, Roeser never analyzed DZ’s activities to assess whether DZ had actually been engaging in private securities transactions. The AWC stated that DZ was never asked by Roeser to provide any disclosure about securities transactions that DZ was effecting away from the firm.
FINRA found that Roeser ultimately failed to adequately examine DZ’s activities despite clear risks that DZ was not complying with securities regulations and rules warranting disclosure of DZ’s private securities transactions and outside business activities. FINRA concluded that Roeser knew that DZ engaged in those activities but failed to take appropriate action to ensure DZ’s disclosure obligations were complied with. Consequently, FINRA found that Roeser’s conduct was violative of FINRA Rule 2010 and NASD Rules 2110 and 3010.
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