Ricky Alan Mantei (also known as Ricky Mantel), of Lexington, South Carolina, a stockbroker registered with Centaurus Financial Inc., has been fined $15,000.00 and suspended for six months by FINRA according to a National Adjudicatory Council Decision containing findings that Mantei directed prearranged trades with counterparties. In the Matter of Department of Enforcement v. Ricky Alan Mantei, Decision No. 2015045257501 (May 30, 2023).
Ricky Alan Mantei appealed a FINRA Extended Hearing Panel Decision that found that Mantei violated Municipal Securities Rulemaking Board (MSRB) Rule G-17 and FINRA Rule 2010 by engaging in prearranged trades with counterparties. He went against his securities broker dealer’s prohibition on prearranged trading in order to bypass the firm’s cross trade policy.
The Hearing Panel fined Mantei $15,000.00 and suspended him from being registered with any FINRA member in any capacity. After National Adjudicatory Council carried out an independent review of the case, it upheld the Hearing Panel’s findings of Mantei’s liability.
Mantei has also been fined $206,000.00 by Securities and Exchange Commission (SEC) based on an Order containing findings that he failed to supervise certain stockbrokers who engaged in unsuitable recommendations. In the Matter of Centaurus Financial Inc., Ricky A. Mantei, and Atul Makharia, Order No. 3-21295.
According to the Order, Makharia and other stockbrokers from Centaurus Financial Inc.’s branch office in Lexington, South Carolina, recommended variable rate structured products to customers. SEC noted that the investments were unsuitable for customers given their specific financial needs and situation.
SEC found that Centaurus Financial Inc. stockbrokers made these recommendations knowing that customers were near retirement age, had an annual income below $100,000, a net worth below $500,000 in many cases, a moderate or low tolerance for risk, investment objectives focused on income and periodic interest payments, significant liquidity needs, an investment horizon of under 15 years, and an unwillingness to put money at risk that would be invested in variable rate structured products. Therefore, Centaurus Financial Inc. violated Securities Act of 1933 Sections 17(a)(2) and 17(a)(3).
Mantei, as the owner and branch manager of Centaurus Financial Inc.’s Lexington branch, did not adequately supervise the Centaurus Financial Inc. stockbrokers to prevent and identify violations of Securities Act Sections 17(a)(2) and 17(a)(3) resulting from unsuitable recommendations of variable rate structured products recommendations to the customers.
SEC indicated that Centaurus Financial Inc. did not adequately implement customer suitability processes to identify if the stockbrokers were making the necessary suitability determinations before recommending variable rate structured products to customers and if Mantei was complying with the procedures. SEC noted that Mantei did not properly comply with Centaurus Financial Inc.’s suitability review processes.
Also, Centaurus Financial Inc. did not maintain certain records for customer accounts. In some cases, Centaurus Financial Inc. did not retain and preserve this information for at least six years and in a non-erasable and non-rewritable format, as federal securities laws required. Centaurus Financial Inc. additionally did not maintain an up-to-date record showing that, for a change in a customer’s investment objectives, Centaurus Financial Inc. timely gave the customer an updated account record or an alternative form containing the information required by Exchange Act Section 17(a) and Rule 17a-3(a)(17).
FINRA Public Disclosure shows that Mantei is referenced in 39 customer initiated investment related disputes concerning Mantei’s conduct while registered with securities broker dealers, including Centaurus Financial Inc. On December 14, 2021, a customer initiated investment related FINRA securities arbitration claim involving Mantei’s conduct was settled for $10,000.00 in damages based upon allegations that Mantei made unsuitable recommendations of corporate bonds away from Centaurus Financial Inc. FINRA Arbitration No. 20-03893.
On January 18, 2022, a customer initiated investment related FINRA securities arbitration claim involving Mantei’s conduct was settled for $70,000.00 in damages based upon allegations that Mantei made unsuitable recommendations of corporate bonds. FINRA Arbitration No. 21-02379. The claim alleges that the stockbroker’s recommendations conflicted with the customer’s risk tolerance.
Mantei is also referenced in a Centaurus Financial Inc. customer initiated investment related FINRA securities arbitration claim that was settled for $30,000.00 in damages based upon allegations that Mantei made misrepresentations of material fact and engaged in unsuitable trading in corporate bonds. FINRA Arbitration No. 21-02401 (April 25, 2022).
Mantei was registered with JP Turner Company as a stockbroker and investment advisor representative between April 12, 2010, and June 15, 2015. He has been registered with Centaurus Financial Inc. as a stockbroker and investment advisor representative since May 19, 2015.
