Robert Juan Escobio of Miami Florida a stockbroker formerly registered with Southern Trust Securities Inc. has been charged by Financial Industry Regulatory Authority (FINRA) Department of Enforcement in a Complaint alleging that Escobio failed to cooperate with a FINRA investigation into accusations that Escobio associated with a FINRA member securities broker dealer during a period in which he was disqualified. Department of Enforcement v. Robert Juan Escobio Disciplinary Proceeding No. 2018059545201 (July 17, 2019).
According to the Complaint, a judgement was obtained by the Commodities Futures Trading Commission (CFTC) on August 29, 2016 supported by the court finding that a fraudulent commodities scheme had been executed by Escobio. Supposedly, at least 135 customers were defrauded through an off-exchange financed precious metals scheme which had ultimately produced $600,000.00 in losses for investors while enabling Escobio, among others, to collectively rake in $2,600,000.00. Escobio was ordered to pay restitution, civil fines, and had been permanently enjoined from engaging in activities which required him to register under provisions of the Commodities Exchange Act.
Consequently, Escobio’s securities broker dealer employer, Southern Trust Securities Inc., was reportedly apprised that Escobio had been barred from associating with any FINRA member. Despite this, the Complaint stated that Southern Trust Securities Inc. tried to have Escobio become registered with the firm as a stockbroker. Securities Exchange Commission (SEC) affirmed FINRA National Adjudicatory Council’s denial of the firm’s request.
The Complaint alleged that in August of 2018, an investigation had been launched by FINRA into whether Escobio kept engaging in securities business when he was prohibited from doing so. Supposedly, FINRA personnel figured out that following NAC’s denial of Escobio’s registration with the firm, Southern Trust’s devices had been potentially utilized by Escobio to effect securities business.
FINRA Department of Enforcement alleged that there were several letters sent to Escobio by FINRA personnel which directed Escobio to furnish documents and information relating to Escobio’s activities with Southern Trust. Evidently, three documents and information requests had been made by FINRA, all warning Escobio that his failure to produce the documents and information could result in him being sanctioned by FINRA. Allegedly, Escobio failed to fulfill FINRA’s requests. The Complaint alleged that Escobio’s failure to cooperate in this regard was violative of FINRA Rules 2010 and 8210.
FINRA also stated that Escobio was asked five times by FINRA personnel to provide recorded testimony; however, Escobio never made any appearance. As had been the case with the documents and information requests, Escobio was allegedly warned that his failure to comply could result in him being barred from the securities industry according to Rule 8210. FINRA Department of Enforcement alleged that Escobio’s failure to testify prevented the regulator from fully ascertaining whether Escobio violated FINRA rules. Consequently, the Compliant alleged Escobio’s conduct was violative of FINRA Rules 2010 and 8210.
FINRA Public Disclosure reveals that Escobio has been identified in five customer initiated investment related disputes which pertain to allegations of his violative conduct while employed with Capital Investment Services Inc., Dean Witter and Prudential-Bach Securities Inc. For example, a customer initiated investment related complaint involving Escobio’s activities was resolved for $30,000.00 in damages supported by accusations that during the time Escobio was associated with Capital Investment Services, unauthorized trades had been executed in the customer’s account; trades were inappropriate given the customer’s financial circumstances, goals or tolerance for risk; and the customer’s investment portfolio had been churned.
Escobio’s employment with Southern Trust Securities Inc. has been terminated as of July 28, 2017.
