Paul Frank Mauceli Jr. the President and Chief Compliance Officer for Reef Securities Inc. has been fined $5,000.00 and suspended for four months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that Mauceli failed to inform customers about their right to rescind their investments in Reef Oil and Gas Drilling and Income Fund. Letter of Acceptance Waiver and Consent No. 2015043469001 (Apr. 11, 2018).
According to the AWC, Reef sold to investors the Oil and Gas Drilling and Income Fund, L.P., a Texas Limited Partnership. on behalf of an issuer. The Fund was reportedly created to drill and acquire interests in United States oil and natural gas properties. Apparently, the prospectus stated that the issuer would provide a revised prospectus containing updated financial information about the issuer’s general partner. Additionally, the prospectus detailed that once the Securities and Exchange Commission declared it to be effective, Reef would furnish the Fund’s investors with a new prospectus and provide investors with a chance to rescind or confirm their decision to invest.
Evidently, Mauceli represented Reef in communicating with the issuer of the Fund regarding the provision of the new prospectus to the Fund’s existing investors. At that time, Mauceli reportedly opted not to provide investors with the new prospectus and the notice regarding the investors’ right to rescind. The AWC stated that the issuer’s and Mauceli’s decision was based on the problematic state of the oil and gas market. Apparently, over one hundred investors who purchased the Fund had not been provided that new prospectus and notice of the right to rescind until months later, when FINRA probed the firm on its failure to comply. FINRA found that Mauceli’s conduct was violative of FINRA Rule 2010.
FINRA Public Disclosure confirms that Mauceli is referenced in three customer initiated investment related disputes pertaining to accusations of his improper conduct during the time that he was associated with Reef Securities Inc. Specifically, a customer initiated investment related arbitration claim involving Mauceli’s conduct was resolved for $115,000.00 in damages based upon allegations that an unregistered securities agent solicited and sold the customer Global Energy VII, L.P. interests. FINRA Arbitration No. 11-01690 (Sept. 15, 2011).
Thereafter, a customer initiated investment related arbitration claim concerning Mauceli’s activities was settled for $15,000.00 in damages supported by accusations that misrepresentations were made to the customer concerning returns and risks of an oil and gas direct participation program. FINRA Arbitration No. 13-01987 (Sept. 9, 2013). Subsequently, a customer filed an investment related arbitration claim regarding Mauceli’s activities where the customer requested $50,000.00 in damages founded on allegations that the customer was placed in an oil and gas direct participation program or limited partnership investment that was unsuitable for the customer. FINRA Arbitration No. 18-03659 (Nov. 1, 2018).
Mauceli has been employed by Reef Securities Inc. since April 30, 1993.
