The following information is from FINRA’s website under “Disciplinary and Other FINRA Actions, November, 2012.”

Robert Joseph Eanell (CRD #2802778, Registered Representative, St. Petersburg, Florida)

fined $7,500 and suspended from association with any FINRA member in any capacity for 30 business days. Without admitting or denying the findings, Eanell consented to the described sanctions and to the entry of findings that he misrepresented his educational background to prospective securities customers, including on his business cards.

FINRA’s findings stated that on annual forms, Eanell’s member firm asked him to identify all of the degrees, titles and designations that he used on letterhead, business cards or in communications with clients. Eanell failed to disclose the fact that he held himself out as the holder of a doctoral degree.
The suspension was in effect from October 1, 2012, through November 9, 2012. (FINRA Case #2011028386201)
(This ends the information from FINRA’s website.)

Securities Attorney, Lars Soreide, of Soreide Law Group, has represented clients nationwide before FINRA. If you have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: http://www.securitieslawyer.com.

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The Financial Industry Regulatory Authority Inc., also known as FINRA, plans to raise number of user fees it charges broker-dealers to help cover a “significant loss” from last year, said chief executive Richard Ketchum in an InvestmentNews article by Dan Jamieson, from April 24th., 2012.

“The broader economic downturn continues to affect trading volumes and industry revenues, which in turn has led to a decrease in Finra’s revenues and resulted in a significant loss for fiscal year 2011,” Mr. Ketchum said in an e-mail to member firms Monday. As a result, “we are proposing adjustments to a number of user-based fees, all of which have remained static for more than five years,” Mr. Ketchum wrote. The fee hikes would help “ensure that we are sufficiently capitalized to meet our regulatory responsibilities,” he said in the message.

Jamieson writes that for this year, Finra will be proposing a hike fees for advertising reviews, corporate financing and new-member applications, Mr. Ketchum told members. Mr. Ketchum didn’t specify how much Finra lost last year. Finra spokeswoman Nancy Condon said the amount will not be available until the self-regulator files its audited results in the next few months.

Additionally, a 25% increase in the trading activity fee will be proposed. For next year, Finra will propose an unspecified “regressive tiered rate” for branch office assessments, and hikes in various registration and disclosure fees.

Jamieson writes that overall, the proposed hikes range from around 5% to 50%.

Mr. Ketchum adds that the fee hikes are needed despite $36 million in spending reductions that were implemented in Finra’s 2012 budget.  He adds that a new board-level pricing working group and Finra’s small-firm advisory board have offered input on the changes.

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In a March, 2012, article for Forbes, Bill Singer writes that 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, AXA Advisors, LLC submitted a Letter of Acceptance, Waiver and Consent (“AWC”), which FINRA accepted. In the Matter of AXA Advisors, LLC, Respondent (AWC 2009020149901, March 13, 2012).

The Respondent AXA Advisors, LLC employs about 5,800 registered persons at 1,300 branch offices; and the firm is a subsidiary of AXA Financial, Inc. (a member of AXA Group). Respondent AXA conducts a general securities business, primarily engaged in the distribution of mutual funds, variable life insurance and variable annuity contracts. According to the AWC, Respondent AXA has no prior relevant disciplinary history.

Singer writes that the former Registered Representative Kenneth Neely was first registered in the securities industry in 1987 and affiliated with several FINRA member firms. By 2001, he was registered with UBS PaineWebber, Inc. and thereafter with Stifel, Nicolaus & Co., Inc.. Beginning in August 2007, Neely was employed at Respondent AXA’s Clayton, MO branch office. According to FINRA’s allegations, when Neely became associated with Respondent AXA in August 2007, he had been the subject of four customer complaints, including three arbitrations, concerning his business practices at prior employers. Additionally, Respondent AXA was aware that he was experiencing financial difficulties. The AWC alleges that in 2001, while employed at UBS, Neely began a Ponzi scheme, which he continued during his employ with Stifel and thereafter at Respondent AXA, where he induced that firm’s customers and others to participate in a fictitious “St. Louis Investment Club” and to invest in an equally fictitious real estate investment trust, the “St. Charles REIT.” Following his July 2009 termination by Respondent AXA for admittedly commingling and converting funds, FINRA entered into an AWC with Neely (AWC/20080157230901 /July 23,2009) whereby he was barred from the industry.

The Forbes article goes on to say that in April of 2008, during an annual audit of Neely, Respondent AXA reviewed Neely’s computer and discovered an Excel spreadsheet, which reflected a payment schedule for eight individuals. The AWC characterizes those individuals as having been induced by Neely to participate in his fraudulent scheme. This spreadsheet was titled “Statement of Accounts with Clients,” marked “Ken Neely,” listed Neely’s home address, and showed a total amount invested of $323,000. Additionally, the spreadsheet set out the initial amount each listed individual had invested and the amounts due in April 2008.

Silver writes that one of Respondent AXA’s examiners became suspicious about the spreadsheet and asked Neely to explain it. According to the AWC, in person and later in an email, Neely explained that a friend and potential client planned to start a business and needed advice on how to manage business finances. In response to that need, Neely claimed that he had used the spreadsheet to show his friend how to keep track of assets and liabilities. Then, in an email describing the spreadsheet, the AWC alleges that Neely falsely explained that he used his name instead of his friend’s company name, and names of individuals, instead of various vendors of his friend’s company. Why such substitutions? According to the AWC, Neely claimed he took these steps to ensure that he “would not be liable for any plans that [his friend] put together on his own or any mistakes he made while inputting his information.” Apparently for good measure, Neely added that his friend provided the individual names – which likely raised quite a few eyebrows given that one of the provided names was a client of Neely’s at Respondent AXA’s. The AWC states that “[d]espite these statements, the Firm accepted Neely’s explanation without adequate further review.

It was reported that FINRA concluded Respondent AXA’s response to the red flags raised by Neely’s spreadsheet, his explanations, and his background constituted a failure to reasonably supervise him and a further failure to investigate adequately the various indications concerning his misconduct, in violation of NASD Rules 2010 and 2110. Accordingly, FINRA imposed upon Respondent AXA the sanctions of a Censure and $100,000 fine.

Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: www.securitieslawyer.com.

Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.

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