Articles Posted in Disciplinary Actions

FINRA fined Prudential Annuities Distributors $950,000 this month for its failure to detect and prevent the theft by its agent, Travis Wetzel, of almost $1,300,000 from a customer’s variable annuity.  The FINRA Letter of Acceptance, Waiver, and Consent may be found here.  

Mr. Wetzel, who was a former registered representative of LPL Financial, allegedly submitted multiple forged wire transfer requests from the variable annuity, to be paid to a third party account in Mr. Wetzel’s wife’s maiden name.

FINRA alleged that Prudential failed to investigate red flags and audits associated with the repeated payments to third parties.  FINRA stated, “PAD failed to establish and maintain reasonable supervisory procedures and controls to supervise third-party distributions and prevent fraudulent withdrawals from VA accounts.”  

As set out in this SEC Order from an Administrative Law Judge (https://www.sec.gov/alj/aljdec/2016/id1033jeg.pdf), Dawn Bennett has been barred from the securities industry by the SEC. Dawn Bennett was a Washington DC area advisor who was previously registered to sell securities with Western International Securities.

Judge Grimes also imposed over one million dollars of fines and disgorgement against Ms. Bennett. The findings in the above Order included the following:

“Respondents repeatedly overstated their AUM [Assets Under Management] by at least $1.5 billion in Barron’s magazine, on a radio show hosted by Bennett, and in various other advertisements and communications with existing and prospective clients to create the impression that Respondents were larger and more successful players in the industry than was actually the case.”

Ismail Elmas plead guilty on October 21, 2014 to a Count of Wire Fraud in the U.S. District Court for the Eastern District of Virginia.  According to the U.S. Attorney’s Office press release (which can be found here), Mr. Elmas worked at Apple Financial Services, an affiliate of Apple Federal Credit Union during the time of the offense.

FINRA’s Brokercheck Report for Mr. Elmas states that Mr. Elmas was previously registered as a securities registered representative with CUNA Brokerage Services and CUSO Financial Services, both FINRA Broker-Dealers.  The Brokercheck Report states that he was terminated by CUSO because he “allegedly converted funds for personal use…”

The above press release references that Elmas admitted to misappropriating client funds given to him for legitimate investments, and that he defrauded more than 10 of his clients, many of whom were seniors and widows. 

FINRA, a regulator of the securities industry, recently issued a Letter of Acceptance, Waiver, and Consent (AWC) regarding former FSC Securities Corporation broker, Andrew Corbman. Pursuant to the AWC, Mr. Corbman was suspended for one month from being registered with any FINRA firm.

Mr. Corbman was registered with FSC Securities from 2/2008 – 1/2011, Kovack Securities from 01/2011 – 11/2015, and Newbridge Securities from 11/2015 – 3/2016.

The AWC may be found here:  http://disciplinaryactions.finra.org/Search/ViewDocument/64878  In the AWC, FINRA alleges that “Between April 2009 and March 2010, while registered with a FINRA member firm, Corbman made unsuitable recommendations to three customers that were inconsistent with the customers’ investment objectives and risk tolerances and resulted in overconcentration oftheir liquid net worth in these investments. From April 2009 through June 2009, Corbman improperly recommended to two ofhis customers, who were a married couple with growth objectives and moderate risk tolerances, to purchase unsuitablehighly risky leveraged, inverse Exchange-Traded Funds (Non-Traditional ETFs”).”