For Claimant Adam Franzen: Rosemary Cooney, Esq., Probate, Guardianship and Trust, P.A., West Palm Beach, Florida. For Respondent Daniel M. King ("King"): Ross J. Kartez, Esq., Ruskin Moscou Faltischek P.C., Uniondale, New York.For Respondent Frank Philip Fusco ("Fusco"): Lawrence R. Gelber, Esq., Lawrence R. Gelber, Attorney at Law, Brooklyn, New York until January 26, 2018. Thereafter, Respondent Fusco appeared pro se.Respondent Michael Salvatore Stanton ("Stanton") appeared pro se.Respondent Legend Securities, Inc. did not appear.
Claimant Franzen: $600 Initial claim Filing Fee; $400 Discovery-related Motion Fee; and $1,800 Hearing Session FeesRespondent Legend Securities: $750 Member Surcharge; and $1,750 Member Process Fee;Respondent King: $450 Postponement Fees
As to Respondent King:Claimant in a nutshell stated that he did not prepare the setup documents for this account, did not read them, did not check margin on the form and was surprised to see margin activity later on. This is not credible as there was a separate form authorizing margin trading with large block letters at the top. Nor did Claimant ever specifically request no margin trading, just that he did not want to lose any more money. He also stated that Respondent King made trades without his approval and that King communicated only by text, not by telephone. This is also not credible because the texts indicate that there were prior discussions, as Claimant never questioned why he had a stock, just why it was down. He never stated in writing that he had not authorized a trade, and testified that he did not know he could. His claim for excess commissions is refuted by account statements showing that Respondent King waived most commissions. The account records show an actual gain in the account. It appears that Claimant believed that margin calls were losses. Arbitrator finds Claimant's allegation and version of events with regard to Respondent King not supported by the evidence and therefore false. For these reasons, expungement of Respondent King's record is appropriate.As to Respondent Stanton:Claimant stated that when he first telephoned Respondent Stanton to complain about Respondent King, Respondent Stanton did not return his calls. This was contradicted by Respondent Stanton who states that he never received a telephone message. In any case, the following business day when Claimant reached out to Respondent Stanton by email, Respondent Stanton responded very promptly and indicated that he took Claimant very seriously. Claimant also testified that Respondent Stanton told him that he should close his account. Respondent Stanton denied this, and it would have been inconsistent with written statements from Respondents Stanton showing concern. The Arbitrator finds Claimant's allegation and version of events with regard to Respondent Stanton not supported by the evidence and therefore false. For these reasons, expungement of Respondent Stanton's record is appropriate.. . .As to Respondent Fusco:Claimant provided no evidence beside his oral testimony, contradicted by Respondent Fusco, that he had any contact with Respondent Fusco at any time during the relevant timeframe.Because Claimant's pleadings did not reference any such contact with Fusco, and because such contact was alleged only at the hearing, the Arbitrator finds Claimant's version of events with regard to Respondent Fusco not supported by the evidence and therefore factually impossible and false. For these reasons, expungement of Respondent Fusco's record is appropriate.
Respondent (1) failed to report customer complaints to FINRA, (2) failed to amend or timely amend registered representatives' Forms U4, (3) failed to establish and maintain a supervisory system and failed to establish, maintain, and enforce written supervisory procedures reasonably designed to ensure that it reported customer complaints, timely amended its registered representatives' Forms U4 and Forms U5, reviewed email correspondence, and considered plans of heightened supervision for certain registered representatives, and (4) improperly charged hundreds of customers "handling fees." The Firm is fined $475,000 and ordered to pay restitution to the customers it charged a "handling fee."SEC Settles Insider Trading Claims Against Former Chairman and CEO of Advanced Medical Optics (SEC Release)Legend-ary FINRA Public Customer Arbitration (BrokeAndBroker.com Blog)Double Jeopardy Clause After Kokesh in SEC Civil Disgorgement: USA, Plaintiff/Appellee, v. Douglas A. Dyer and James H. Brennan III, Defendants/Appellants (Opinion, United States Court of Appeals for the Sixth Circuit, 17-6174 and 17-6177 / November 13, 2018)Oisin's Bits: LPL hacked through Capital Forensics' breach, leaks personal info, account numbers (RIABiz.com)Trader Sentenced to 15 Months in Federal Prison for Misappropriating $1.1 Million in Cryptocurrencies (DOJ Release)FINRA Settles Business Expense CaseIn the Matter of John J. Baldeck, Respondent (AWC 2016050321501, November 12, 2018).Nigerian National Indicted for Internet Fraud Scheme (DOJ Release)