John Paul Corsi, of Parma, Ohio, a stockbroker formerly registered with WRP Investments, has been fined $20,000.00 and suspended for twenty months from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he participated in an undisclosed outside business activity and private securities transaction, and made unsuitable investment recommendations to customers. Letter of Acceptance, Waiver and Consent, No. 2015046951301 (Jan. 3, 2016).
According to the AWC, from November of 2009 to August of 2013, while Corsi was associated with WRP Investments, he also maintained employment with Argent of Nevada, which was in the judgment collection business. Apparently, Corsi never provided his firm with notification that he participated in Agent’s fundraising efforts as he was required to do. FINRA stated that Corsi was obligated to provide his firm with written notification, and failed in this regard. Consequently, FINRA found that Corsi’s conduct was violative of NASD Rule 3030, as well as FINRA Rules 2010 and 3270.
The AWC additionally mentioned that Argent promissory notes were recommended by Corsi to WRP customers between November of 2009 and August of 2013. The AWC revealed that fifteen of WRP’s customers made a cumulative $1,790,041.00 investment in the notes, where Corsi received a five percent fee associated with each of the customers’ investments. However, Corsi never notified WRP regarding his participation in the sales of notes; rather, he stated to WRP that he had not taken part in private securities transactions. FINRA found that Corsi’s conduct in this regard was violative of FINRA Rules 2010 and 3040.
The AWC also stated that customers of WRP received recommendations from Corsi to place a substantial amount of the customers’ net worth in the promissory notes issued by Argent. Yet, these customers were reportedly seeking growth on a tax-deferred basis. The notes, according to FINRA, were not suitable for the customers based upon the risk factors pertaining them, which was apparent based upon the notes’ interest rates ranging from ten to eighteen percent. FINRA indicated that Corsi lacked an adequate basis to conclude that the Argent notes were suitable for the customers. Thus, FINRA found Corsi’s conduct to be violative of NASD Rules 2010 and 2310, and FINRA Rule 2111.
FINRA Public Disclosure reveals that on April 1, 2016, a customer filed an investment related arbitration claim involving Corsi’s conduct, in which the customer sought $345,000.00 in damages based upon allegations that Corsi made investment recommendations for the customers to place a substantial amount of money into investments which were not suitable for them.
Corsi’s registration with WRP Investments, Inc. was terminated on September 12, 2014. Corsi was registered with Sterne Agee Financial Services, Inc. from September 14, 2014 to December 28, 2015, at which point he was terminated based upon allegations that he engaged in outside business activities in violation of Sterne Agee’s policies.
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