Ralph Richard Von Lutzow of Sarasota Florida a stockbroker formerly registered with Oberweis Securities Inc. has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that (1) Von Lutzow engaged in private securities transactions involving customers of the firm (2) Von Lutzow accepted customer loans without the firm’s permission and (3) Von Lutzow failed to be forthcoming with the firm when it investigated his activities. Letter of Acceptance Waiver and Consent No. 2017055306401 (Dec. 3, 2018).
According to the AWC, from October of 2012 to January of 2014, during the time that Von Lutzow was employed at Oberweis Securities Inc., a total of six loans had been taken by Von from a customer of the firm, VLH. The loans, which reportedly totaled $32,000.00, were provided to Von Lutzow at a time that the customer was in his eighties.
Evidently, the firm did not maintain procedures which authorized registered representatives entering into borrowing or lending arrangements with customers of the firm. However, the AWC stated that Von Lutzow had been administered compliance questionnaires from the firm during the time he borrowed from the customer. Apparently, in those questionnaires provided to him between 2012 and 2014, Von Lutzow represented that he never borrowed securities or money from the firm’s customers. Apparently, Von Lutzow neglected to provide Oberweis notification about this or procure the firm’s approval before he borrowed the customer’s funds. FINRA found Von Lutzow’s unauthorized borrowing arrangement to be violative of FINRA Rules 2010 and 3240.
FINRA additionally stated that Von Lutzow engaged in unauthorized private securities transactions. Specifically, from July of 2013 to April of 2014, investments in Reven Pharmaceuticals had been made by a firm customer, VLH. Particularly, the customer bought $2,550,000.00 worth of Reven Pharmaceuticals stock options, convertible notes and stock. Evidently, Von Lutzow had been made aware that VLH had been solicited investments from Reven, which included investments that VLH made in 2013 and 2014. The AWC further stated that Von Lutzow helped VLH purchase convertible notes, stock options and stock in Reven in which Von Lutzow faxed convertible debenture term sheets and share purchase agreements to Reven on VLH’s behalf during that time frame. In return for Von Lutzow’s efforts, he was reportedly provided 1,155,000 in stock issued by Reven, and was paid $12,500.00.
The AWC stated that the firm never authorized any offering of Reven’s convertible notes, stock options or shares. Additionally, Von Lutzow reportedly failed to inform the firm about his involvement in the transactions. Particularly, Von Lutzow failed to inform the firm about what his involvement consisted of in those transactions and if he would be compensated. FINRA also stated that Von Lutzow failed to generate approval from the firm before he engaged in those transactions. Consequently, FINRA found that Von Lutzow’s conduct was violative of FINRA Rule 2010 and National Association of Securities Dealers (NASD) Rule 3040.
Moreover, the AWC stated that Von Lutzow provided FINRA personnel with misleading and false information. Apparently, on August 24, 2017, Von Lutzow was sent a request from FINRA that called upon him to provide FINRA with information about his activities. Apparently, FINRA’s Rule 8210 request informed Von Lutzow that he would be required to fully comply, otherwise he would be sanctioned.
Von Lutzow purportedly responded to FINRA’s request on October 27, 2017; however, the response had been riddled with lies. Particularly, Von Lutzow represented that Reven never compensated or remunerated Von Lutzow for Von Lutzow’s involvement with VLH’s investments in Reven. Evidently, this false statement was made on more than one occasion. In another response, Von Lutzow claimed that he was never paid by Reven in any amount at any time. The AWC stated that Von Lutzow also failed to be forthcoming about his six loans from VLH.
After Von Lutzow’s initial response, FINRA sent Von Lutzow another request for information. The November 28, 2017 letter warned Von Lutzow about his non-compliance serving the way for consequences to Von Lutzow’s ability to remain in the securities industry. The AWC stated that Von Lutzow was asked in the second letter about his receipt of customer loans. In response, Von Lutzow failed to identify the full extent of his loans from VLH. FINRA found Von Lutzow’s activities in this regard to be violative of FINRA Rules 2010 and 8210.
FINRA Public Disclosure confirms that Von Lutzow has been identified in two additional customer initiated investment related disputes containing allegations of Von Lutzow’s misconduct. Specifically, a customer filed an investment related civil action in the Twelfth Judicial Circuit Court of Sarasota, Florida which involved Von Lutzow’s conduct where the customer sought damages exceeding $15,000.00 based upon accusations of omissions, misrepresentation, and bad advice regarding Reven Pharmaceuticals, Inc.
