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FINRA Disciplinary Actions: July 2019

FINRA Disciplinary ActionsFINRA, the Financial Industry Regulatory Authority, has issued its July 2019 monthly report of disciplinary actions levied against brokers and brokerage firms. The report includes information about brokers barred by FINRA for document forgery and annuity churning, among other activities, as well as brokers suspended by FINRA for improperly liquidating variable annuities and engaging in unauthorized outside business activities, among other activities.

Individuals Barred by FINRA:

Broker Name CRD Number Location Circumstances Surrounding Bar
Dominic Anthony Topiano CRD#:

4761462

Lyndhurst, Ohio recommended unsuitable non-traditional ETFs
Dean Harrison Grant CRD#:

1945209

Roswell, Georgia converted funds from customers, forged documents
Mark Lewton Hopkins CRD#:

2653473

Grand Blanc, Michigan refused to provide information regarding Form U5
Philip John Nalesnik CRD#:

4561380

Mt. Pocono, Pennsylvania Refused to provide on-the-record testimony requested by FINRA regarding outside business activities
William Justin Poynter CRD#:

5342794

Grapevine, Texas Refused to provide on-the-record testimony requested by FINRA regarding his U5 (“he had been permitted to resign during a firm review into whether he had submitted inaccurate expenses under the firm’s tuition reimbursement program”)
Christopher Beghtel CRD#:

5837978

Cary, North Carolina “Refused to provide documents and information requested by FINRA in connection with an investigation regarding a program by which his member firm provided reimbursement to employees who purchased computer equipment”
Thomas Leroy Studer CRD#:

6300308

The Villages, Florida Refused to testify before FINRA regarding how he “was terminated for failing to follow procedures regarding power of attorney documentation that resulted in the firm facilitating a transaction by an individual who was not an authorized representative on the account”
Michael Anthony Bastardi CRD#:

6015424

Warwick, New York engaged in unsuitable margin trading, unauthorized trading, fraud, forgery
Benjamin Frank Bourgeois Jr. CRD:

2145555

Harvey, Louisiana borrowed client money, converted customer funds, committed fraud
Frederick David Holloway CRD#:

248814

Easton, Maryland Engaged in annuity churning

 

Dominic Topiano has been barred by FINRA for recommending ETFs that were unsuitable for his clients. He also “Tropiano engaged in the securities business of his firm by soliciting the purchase and sale of non-traditional ETFs in the accounts of firm customers while not properly registered with FINRA.”

Philip Nalesnik has been barred by FINRA for failing to provide information about is undisclosed outside business activities.

Michael Bastardi has been barred by FINRA after he failed to provide into allegations that “he had engaged in unsuitable margin trading, unauthorized trading, fraud and forgery when he was registered through two firms, resulting in damages of approximately $250,000.”

Benjamin Bourgeois has been barred by FINRA for failing to produce information regarding allegations that he borrowed funds from a client and committed fraud.

Frederick David Holloway has been barred by FINRA after he claimed he had completed continuing education courses related to variable annuities, but he did not complete these classes himself. Holloway also engaged in annuity churning, switching clients between similar annuities to generate excessive commissions.

Individuals Suspended:

Broker Name CRD Number Location Duration of Suspension Circumstances Surrounding Suspension
Ronald Richard Blasczyk CRD#: 3065429 Little Suamico, Wisconsin June 3, 2019, through June 21, 2019 recommended unsuitable variable annuities
Michael Milad Tanha

 

CRD#:

6022108

Los Angeles, California May 6, 2019, through March 5, 2020 engaged in undisclosed outside business activities; engaged in private securities transactions
Steven Paul Cooper CRD#:

4879645

Los Angeles, California May 20, 2019, through July 19, 2019 recommended unsuitable mutual fund trades
Stephen Patrick Tosha CRD #: 5970854 Dallas, Texas June 3, 2019, through August 2, 2019 actions led firm to keep inaccurate books and records
Stuart Jeffries Henley

 

CRD #:

1368973

Tampa, Florida May 20, 2019, through July 1, 2019 “exercised discretion in an elderly customer’s account without receiving acceptance of the account as discretionary by his member firm”
Lisa Jeanne Lastrapes

 

CRD#:

2739854

Grapevine, Texas June 3, 2019, through August 2, 2019 “did not disclose to her member firm that her adult daughter was named as the beneficiary of a 93-year-old firm customer’s Individual Retirement Account (IRA) account and that the customer named Lastrapes as medical power of attorney”; engaged in undisclosed outside business activities
Christopher Michael Dowden; Robert Lee Harger Jr. CRD#:

4089978; CRD#: 863069

Denham Springs, Louisiana; Baton Rouge, Louisiana Dowden: June 17, 2019, through August 16, 2019; Harger: August 19, 2019, through November 18, 2019 Harger permitted clients to sign to partially completed forms related to variable annuities; Dowden altered variable annuity exchange forms
Michael Lester Carter CRD#: 2882478, Henderson, Nevada June 3, 2019, through August 2, 2019 engaged in undisclosed private securities transactions
Alexander Michael Panas III

 

CRD#: 2249803 Parsippany, New Jersey June 17, 2019, through June 28, 2019 failed to safeguard consumer financial information
Frank H. Kelly

 

CRD #: 2028226 New Cumberland, Pennsylvania June 17, 2019, through September 16, 2019 engaged in unauthorized trading
Curtis Roy Ile

 

CRD #: 4009787 Mount Carmel, Illinois June 3, 2019, through December 2, 2019 improperly recommended over-the-counter (OTC) equity securities
David John Strnad CRD #: 1982721 Franklin, Tennessee June 3, 2019, through December 2, 2019 “executed unauthorized transactions involving bank-issued certificate of deposit (CD) in accounts of an elderly customer

 

Ronald Richard Blasczyk consented to the finding that he made an unsuitable recommendation that a customer liquidate a variable annuity, which led the client to forfeit a guaranteed income benefit. According to the FINRA report, “Blasczyk did not earn a commission on the variable annuity liquidation, and the customer did not sustain any realized losses because of the liquidation.”

Michael Milad Tanha consented to the finding that he received commissions for undisclosed outside business activities and engaged in private securities transactions, “the sale of which totaled $500,000, without providing prior written notice or receiving approval from the firm. Tanha solicited securities investments in an entity from investors, two of whom were firm customers,” according to the FINRA report.

Steven Paul Cooper consented to the finding that he “failed to exercise reasonable diligence concerning the transactions, and therefore did not understand that the customers could have purchased the mutual funds without paying any upfront sales charges … However, no sales charges were actually incurred because Cooper’s member firm cancelled and rebilled the trades at issue without any upfront sales charges,” according to the FINRA report.

Stephen Patrick Tosha consented to the finding that “caused his member firm to create and maintain inaccurate books and records. The findings stated that in order to accommodate a customer’s request that she not be required to sign a disbursement request form each time she needed a disbursement from her account, Tosha caused her to sign a blank disbursement request form,” according to the FINRA report.

Stuart Jeffries Henley consented to the finding that he “he exercised discretion in an elderly customer’s account without receiving acceptance of the account as discretionary by his member firm,” according to the FINRA report.

Lisa Jeanne Lastrapes consented to the finding that she engaged in outside business activities and  “did not disclose to her member firm that her adult daughter was named as the beneficiary of a 93-year-old firm customer’s Individual Retirement Account (IRA) account, and that the customer named Lastrapes as medical power of attorney,” according to the FINRA report.

Christopher Michael Dowden and Robert Lee Harger Jr. consented to the finding that Harger allowed customers to submit partially completed variable annuity forms and later completed them himself. “Although Dowden was not aware that the customers had signed the forms while partially complete, he observed that the customers had left their signatures undated. Upon approving the transactions, Dowden altered the variable annuity exchange forms by writing in dates for the customers’ signatures, using the date that he had approved the transaction,” according to the FINRA findings.

Michael Lester Carter consented to the finding that he “engaged in an undisclosed and unapproved private securities transaction when he sold a $25,000 promissory note to an investor without providing prior notice to or obtaining approval from his member firm. The findings stated that Carter solicited the investor to purchase the promissory note that was related to a purported real estate investment fund. Carter sold the $25,000 promissory note to this investor and received a $1,250 commission. Later, the fund filed a voluntary Chapter 11 bankruptcy petition,” according to the FINRA report.

Alexander Michael Panas III consented to the finding that “after accepting an offer to join another FINRA member firm, he improperly took non-public personal customer information from his member firm, without its or the customers’ knowledge or consent. … as a result, Panas caused his firm to violate the SEC’s Regulation S-P, regarding privacy of consumer financial information and safeguarding personal information,” according to FINRA findings.

Frank H. Kelly consented to the finding that he engaged in an unauthorized trade in a client’s account. His use of discretion “is aggravated by instances where he liquidated positions in a sum materially greater than the dollar amount requested by the customer and by the inaccurate annual attestations he submitted denying that he had used discretion,” according to FINRA’s findings.

Curtis Roy Ile consented to the finding that he “he caused his member firm’s books and records to be inaccurate by mismarking order tickets as unsolicited when the transactions were, in fact, solicited. The findings stated that Ile mismarked the order tickets because he believed that his firm would not have processed the transactions if they had been correctly marked as solicited. The findings also stated that Ile recommended over-the-counter (OTC) equity securities to customers without reviewing the current financial statements of the issuers to determine whether there was a reasonable basis for making such recommendations,” according to FINRA’s findings.

David John Strnad consented to the finding that he “he executed unauthorized transactions involving bank-issued certificates of deposit (CDs) in accounts of an elderly customer. The findings stated that although the customer verbally authorized him to purchase new CD issuances after maturity of prior CD issuances, Strnad exceeded the scope of his authority by selling CDs held by the customer prior to maturity, nearly always at a loss, and using the proceeds to purchase new CDs for the customer,” according to FINRA’s findings.

Firms Fined:

  • FIS Brokerage Securities LLC (CRD#: 104162, Geneva, Illinois)
  • Oriental Financial Services Corp. (CRD#: 29753, San Juan, Puerto Rico)
  • Woodbury Financial Services, Inc. (CRD#: 421, Oakdale, Minnesota)

Complaints Filed:

  • William Joseph Kielczewski (CRD#: 4034356, Ottawa Hills, Ohio)
    • “Kielczewski was named a respondent in a FINRA complaint alleging that he falsely and repeatedly represented to his member firm through compliance attestations and email correspondence that he did not solicit investments for a hedge fund and that he was merely a passive owner/investor, when, in fact, he was actively involved with the fund, promoting it to potential investor,” according to the FINRA report.
  • Oscar Nunez (CRD#: 6014411, North Bergen, New Jersey)
    • “Nunez was named a respondent in a FINRA complaint alleging that he converted $7,000 from an elderly customer. The complaint alleges that to convince the customer to give him the funds, Nunez told her that the funds were for upfront commissions on her accounts at his member firm. In fact, the customer owed no commissions on her accounts and regardless, any commissions would be payable to the firm at the time incurred, not in advance or to Nunez. Rather than use the customer’s funds to pay commissions, Nunez deposited the funds into his personal bank account and put the funds to personal use,” according to the FINRA report.

For a list of individuals and firms suspended for failing to provide required information to FINRA under FINRA Rule 9552, please see pages 16-19 of the July 2019 monthly disciplinary report.

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