Richard Alyn Rappaport (also known as Rick Rappaport) of New York, New York, a stockbroker registered with Westpark Capital Inc., was the subject of a customer initiated investment related Financial Industry Regulatory Authority (FINRA) securities arbitration claim which was settled for $1,050,000.00 in damages based upon allegations that Rappaport failed to supervise the sale of certain securities including Blink Charging Co., ReShape LifeSciences Inc., and Jaguar Health, Inc., and private placements in FTE Networks and Horizon Select Technology Fund LLC by John A. Orlando. FINRA Arbitration No. 20-01721 (Sept. 22, 2022). Immediately following the settlement, Rappaport requested an expungment. However, the Panel denied his request.
FINRA Public Disclosure shows that Rappaport has been fined $10,000.00 and suspended for thirty days by NASD based upon allegations that Rappaport failed to comply with an NASD suspension. Case No. E022004062801 (Oct. 12, 2006).
This is not the first time that Rappaport has been the subject of a regulatory action concerning his conduct in the securities industry. Rappaport has been fined $500.00 by the state of Illinois based upon allegations that Rappaport received NASD sanctions. Case No. 0400527 (Apr. 9, 2007).
On November 22, 2021, Rappaport was fined $30,000.00 and suspended from associating with any FINRA member in any capacity for four months based upon allegations that Rappaport made misrepresentations, made omissions, and failed to supervise the sale of certain promissory Notes. FINRA Enforcement Action (AWC) No. 2017054381603.
According to the AWC, between January 2012 and January 2018, WestPark Capital Financial Services LLC, which was majority owned by Rappaport until January 2018, sold 33 promissory notes issued by WestPark’s parent company to 21 customers, which resulted in $3.9 million being raised. In connection with selling the offering, WestPark made omissions and negligent misrepresentations of material facts to the customers. Rappaport also made omissions and negligent misrepresentations in connection with the sale of four of the promissory notes.
Specifically, prospective investors were sent a Historical Analysis document that claimed to show what investors could have received in returns had they invested from 2006 and 2010. In reality, the numbers were hypothetical and were not actual returns from the offering.
Additionally, WestPark and Rappaport failed to reasonably supervise representatives that solicited investments in the offerings. Specifically, Rappaport did not provide reasonable training to the registered representatives concerning the offering and failed to respond to customer questions concerning raised red flags. Final approval of the offering documents was Rappaport’s responsibility, and he was also designated supervisor regarding WestPark’s private placement business.
according to the AWC, Westpark was also required to establish, maintain, and enforce special written procedures where all telephone conversations between registered representatives and customers were to be recorded to ensure that applicable securities regulations and laws were complied with. WestPark’s special written procedures took effect in July 2019 but were not reasonably designed to comply with the mandate, and the firm failed to record all conversations as required by the FINRA’s Rule. As a result, WestPark and Rappaport violated FINRA Rules 2010, 3110(a), 3170, and NASD Rule 3010(a).
Richard Rappaport was associated with Westpark Capital Inc. in New York, NY, as an investment advisor representative from January 21, 2004 to December 22, 2021. Rappaport has been associated with Westpark Capital Inc. in Los Angeles, CA, as a stockbroker since November 18, 1999.
