Michael Alan Siegel of Edison New Jersey a stockbroker formerly registered with National Securities Corporation is the subject of a Summary Penalty and Revocation Order in which Siegel has been fined $100,000.00 and his stockbroker registration in the State of New Jersey was revoked based upon the New Jersey Bureau of Securities Bureau Chief’s findings that (1) Siegel engaged in fraudulent option trades in an elderly married couple’s investment account (2) Siegel took possession of loans and checks from the married couple in violation of National Securities Corporation’s policy and (3) FINRA barred Siegel from having any association with any FINRA member for failing to comply with an investigation. In the Matter of Michael Alan Siegel (Feb. 1, 2018).
According to the Order, between July of 2013 and January of 2016, a close personal relationship developed between Siegel and the married couple which allowed for a total of $280,000.00 to be improperly procured by Siegel from the couple for Siegel’s own use. The Order indicated that Siegel preyed on the couple, taking advantage of the husband’s diminished capacity.
Evidently, Siegel had an arrangement with the couple where he was supposed to receive a ten percent commission for effecting options contracts transactions on behalf of the couple; however, Siegel never established an account for purposes of options trading. Apparently, the couple was provided false information and phony transactional statements making it appear as though there were legitimate trades being entered by Siegel in an institutional account for their benefit. Evidently, the couple had also been lied too by Siegel in regard to National Securities Corporation’s approving him for an institutional trading program.
The Order revealed that by Siegel’s actions, the couple wrote him checks for what customers believed to be the ten percent commissions on Siegel’s options transactions. Indeed, from July of 2013 to January of 2016, Siegel received a total of fifty-seven checks which totaled $280,000.00. Apparently, the couple’s funds were utilized by Siegel to cover, inter alia, concert tickets, business and travel expenses, apartment and home improvement expenses; and Siegel’s cash needs. The Bureau Chief noted that the wife continued to be defrauded by Siegel after he knew that the wife’s husband and son died. Consequently, the Bureau Chief found Siegel’s conduct violative of N.J.S.A. 49:3-52(c); 49:3-58(a)(1); 49:3-58(a)(2)(vii) and N.J.A.C. 13:47A-6.3(a)(43)
The Order revealed that Siegel blatantly violated his securities broker dealer employers’ procedures. Particularly, Siegel reported to his employing securities broker dealer at the time, Concorde Investment Services, that he would at no point take possession of customer funds when those funds were made payable to the stockbroker or an account which the stockbroker controlled. Apparently, Siegel took possession of nineteen checks from the couple during his employment in violation of the firm’s policy. Additionally, when Siegel became employed by National Securities Corporation, documentation had been signed by him referencing his understanding of the firm’s prohibition on taking customers’ checks made payable to the stockbroker. Nevertheless, Siegel took possession of forty-two checks from the couple. The Bureau Chief also stated that Siegel borrowed customer funds and took gifts from the couple contrary to the firms’ procedures.
The Bureau Chief further noted that Siegel has been barred from associating with any FINRA member in any capacity founded on findings that Siegel failed to cooperate with a FINRA investigation into accusations of his fraudulent activities. Case No. 2016050346301 (Oct. 28, 2016). Initially, Siegel was mailed a Suspension from Association letter for his lack of compliance. Siegel was warned by FINRA by that time that his failure to request the termination of his suspension by October 27, 2016 would result in him being automatically barred by FINRA. Siegel reportedly failed to respond by the deadline. The Bureau Chief found that under N.J.S.A. 49:3-58(a)(2)(vi), Siegel’s expulsion from FINRA served a proper basis for Siegel’s securities agent registration to be revoked.
FINRA Public Disclosure reveals that Siegel is referenced in four customer initiated investment related disputes containing allegations of Siegel’s violative conduct while employed with National Securities Corp and Concorde Investment Services LLC. Specifically, a customer initiated investment related arbitration claim regarding Siegel’s conduct was resolved for $150,000.00 in damages based upon accusations that between 2013 and 2016, the customer had been defrauded; false or misleading statements had been made concerning investments; the customer’s account was churned; and equity and real estate investment trust transactions were not appropriate for the customer. FINRA Arbitration No. 16-01551 (Oct. 13, 2017).
Subsequently, a customer initiated investment related arbitration claim involving Siegel’s activities was settled for $250,000.00 in damages supported by allegations that the customer’s account was churned; real estate security and over-the-counter equities transactions effected in the customer’s account were unsuitable for the customer; misrepresentations had been made to the customer; and the customer was defrauded while Siegel was associated with National Securities Corp and Concorde Investment Services. FINRA Arbitration No. 16-01551 (Oct. 24, 2017). Additionally, on February 7, 2018, a customer filed an investment related complaint concerning Siegel’s activities where the customer sought $70,875.00 in damages founded on accusations including suitability, unauthorized trading and misrepresentation of real estate securities. Siegel is also subject of a customer initiated investment related complaint on May 24, 2019 in which the customer requested $17,588.00 in damages based upon allegations of being sold bad private placements.
