NSF Checks Checkmate Stockbroker's Career

May 24, 2012

A picture taken on November 16, 2011 shows an ...

For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Paul Christian DeRusso submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. In the Matter of Paul Christian DeRusso, Respondent (AWC 2010023716601, May 22, 2012).

DeRusso first became registered with FINRA as a General Securities Representative ("GSR") in 1996 and starting in 2006, was associated with Citigroup Global Markets Inc. ("CGMI"), where he became registered as a GSR, General Securities Principal, Equity Trader, Options Principal, and Municipal Securities Principal.  CGMI filed a Uniform Termination Notice for Securities Industry Registration ("Form U5″) on July 13, 2010, indicating that DeRusso  had been discharged and his last date of employment was June 16,2010. The AWC asserts that DeRusso has no prior disciplinary history with the Securities and Exchange Commission, any state securities regulator or self-regulatory organization.


Between approximately November 7, 2009 and March 9, 2010, the AWC alleges that DeRusso deposited into his Citibank checking account via ATM machine at least eight checks signed by him and made payable to either his mother or his former wife. The deposited checks were drawn on his Citibank checking account.

All of the subject checks were returned for insufficient funds ("NSF"). In some instances, the deposits temporarily inflated his account value, allowing DeRusso to use the funds prior to the NSF reversal, which he apparently covered with subsequent deposits.

Form U4

In and around April 2009, DeRusso became aware that a judgment and resulting wage garnishment had been issued against him, but he did not timely amend his Form U4 until April 20, 2011 (some 24 months later), when he became registered with another FINRA member.

As a result of the alleged NSF checks and untimely U4 amendment, and in accordance with the terms of the AWC, FINRA imposed a $10,000 fine and a 90-day suspension from association with any FINRA member firm in any and all capacities.

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