FINRA Sanctions 10 Troublemaker Global Area Brokers
The Financial Industry Regulatory Authority (FINRA) issued a press release announcing that the regulator found various securities including misleading sales pitches, churning, and other business misconduct at Global Arena Capital Corp (Global Arena). FINRA cancelled Global Arena's membership in July 2015. FINRA barred seven former Global Arena brokers from the securities industry, suspended an eighth person until a bar takes effect in October, and barred two former branch managers from serving as supervisory principals.
FINRA’s actions were against the former President of Global Arena, Barbara Desiderio, and five former representatives David Awad (also known as David Bennett), James Torres, Peter Snetzko, Alex Wildermuth, and Michael Tannen in all capacities. FINRA also barred two former principals of the firm Kevin Hagan and Richard Bohack in a principal capacity for supervisory failures. FINRA also sanctioned two former representatives Niaz Elmazi (also known as Nick Morrisey) and Andrew Marzec for failing to cooperate with FINRA's investigation.
FINRA stated in the press release that the agency is focusing on a troubling practice within the securities industry sometimes referred to as "cockroaching." See More Than 5,000 Stockbrokers From Expelled Firms Still Selling Securities, The Wall Street Journal, (Oct. 4, 2013). The term refers to the practice by which groups of bad brokers expose a brokerage firm to excessive liabilities causing the firm to close and leave investors without recourse. The brokers then typically migrate together like a herd to another brokerage firm only to conduct the same activity again.
FINRA stated in the release that the agency had been tracking groups of brokers that move from one risky firm to another and that 7of the 10 individuals in the present action had moved from HFP Capital Markets LLC, a problem firm that FINRA expelled, to Global Arena. According to FINRA, Global Arena opened a branch office in October 2013 to register a number of brokers who had been discharged by HFP. FINRA found that just like their conduct at HFP, the branch office's business model involved cold-calling customers, including seniors, to make solicited recommendations of securities.
FINRA stated that it employed a risk-based approach to identify brokers who had moved from HFP to Global Arena and were then subject to heightened regulatory scrutiny during a 2014 exam. During FINRA’s onsite audit and investigation the agency found that the Global Arena representatives at issue engaged in securities fraud by using misleading sales pitches and high pressure sales tactics to make sales of junk bonds and other securities. Brokers were also accused of churning customer accounts, a fraudulent practice consisting of recommending frequent trades, and also made unsuitable recommendations.
Investors who have suffered losses may be able recover their losses through securities arbitration. The investment attorneys at Gana LLP are experienced in representing investors in cases where their broker has acted inappropriately. Our consultations are free of charge and the firm is only compensated if you recover.