Securities Roundup: Venecredit Fined $25K for Working with Foreign Finders, Ex-Merrill Lynch/LPL Financial Rep. Faces Fraud Charges, & BrokersXpress Broker is Suspended Over Private Placement-Related Misconduct
Venecredit Fined $25K for Working with Foreign Finders to Generate Retail Investor Business
According to the Financial Industry Regulatory Authority, Venecredit Securities must pay a $25,000 fine for allegedly using foreign finders to get new retail investor business. The financial firm has now been censured for two years.
The SRO says that the foreign finders served as the primary contacts between Venecredit and the clients and had access to account information via the clearing firm’s platform. These finders worked for a foreign brokerage firm that shares directors and officers with Venecredit and its wholly owned entity. FINRA contends that not only did Venecredit fail to create and put into effect proper supervisory measures that would have allowed it to look at customer complaints about the employees at the foreign brokerage firm, but also it failed to keep electronic correspondence from both the foreign traders and the personal email accounts of its registered representatives.
Ex-Merrill Lynch/LPL Financial Rep. Faces Fraud Charges in Missouri
Missouri Secretary of State Jason Kander has charged former LPL Financial, LLC (LPLA) representative Greg John Campbell with serious misconduct. Prior to working for LPL, Campbell was with Merrill Lynch, Pierce, Fenner & Smith Inc. (MER)
Per the complaint, while registered with both financial firms, Campbell established a line of credit against the brokerage accounts of clients without their knowledge or permission. He then allegedly modified their addresses in their accounts so that they stopped getting their statements and correspondence from the firms and forged account statements for them showing the wrong balances. Using forged signatures, he allegedly moved over a million dollars from these to his accounts without their knowing or consent.
BrokersXpress Broker is Suspended from FINRA and NFA Over Alleged Securities Misconduct
BrokersXpress broker Tracy Morgan Spaeth is suspended from associating with any member of the Financial Industry Regulatory Authority or the National Futures Association. Per FINRA’s disciplinary action, Spaeth failed to ask for or receive the necessary written approval for private placement transactions that occurred between October and December 2010 when he solicited over 100 clients to buy shares in ProfitStars Int'l Corp., raising $8 million in the process. He also allegedly provided a deficient webinar to the investing clients that did not disclose the strategy risks involved and included forecasts about the security’s future performance. Spaeth’s bar from FINRA is two years and he has to pay a $50K fine.
Meantime, the NFA’s suspension of Spaeth comes after his alleged involvement with Profitstars Intl Corp. and International Commodity Advisors, which were both disciplined for using ParagonFX Enterprises, LLC, an unregistered and unregulated company, as a counterparty to the trading of their customers. The organization contends that Spaeth used deceptive and misleading promotional materials to get clients to invest in the companies even though he did not conduct the necessary due diligence on them. NFA says that Spaeth had a deal with a least one of the companies that gave him 50% of gross profits from his clients’ accounts (and perhaps even a referral bonus even if a client suffered a net loss following fees). His bar from the NFA is three years and he has to pay a $5K fine.
Related Web Resources:
Ladue advisor took $1.5 million, regulators say, St. Louis Post-Dispatch, February 20, 2013
NFA files complaint against Tracy Morgan Spaeth charging him with multiple misleading forex practices, Forexmagnates.com, November 23, 2012
More Blog Posts:
SEC Needs to File Securities Fraud Lawsuits Sooner, Rules the US Supreme Court, Institutional Investor Securities Blog, February 28, 2013
Plaintiff Must Arbitrate Faulty Investment Advice Claim With TD Ameritrade But Can Proceed With Litigation Against Oakwood Capital Management, Stockbroker Fraud Blog, October 29, 2012
Judge that Dismissed Regulators’ Claims Against Morgan Keegan to Rule on ARS Lawsuit Again After His Ruling Was Reversed on Appeal, Institutional Investor Securities Blog, November 27, 2012