The following information has been obtained on FINRA’s website under “Disciplinary and Other FINRA Actions, September, 2013.”
Richard D. Mellema (CRD #4592368, Registered Principal, Grandville, Michigan)
was fined $15,000, suspended from association with any FINRA member in any capacity for 30 business days and suspended from association with any FINRA member in any principal capacity for six months. Without admitting or denying the findings, Mellema consented to the described sanctions and to the entry of findings that as the firm’s CCO, he was the principal who supervised the church bonds business, approved them for sale by his member firm’s representatives and drafted the WSPs relating to that business. Richard Mellema allegedly failed to conduct adequately reasonable diligence before the firm’s representatives began to sell the church bonds. Richard Mellema relied solely on the documents provided by the churches and conducted no independent and ongoing diligence in the offerings. Mellema's procedures for the sale and underwriting of church bonds were deficient.
FINRA's findings stated that Mellema was responsible for pricing the church bonds. All church bonds were initially priced at par, but were never altered for changes in issuer risk, interest rate risk or other factors. Prices were only altered for accrued interest. Mellema caused misleading communications to be sent to church bond customers.
FINRA also stated that Mellema approved for sale, interests in a fund by his firm’s representatives, and supervised the sale. Mellema failed to conduct adequate diligence before approving the fund for sale and failed to implement adequate WSPs and controls in connection with the fund.
The suspension was in effect from July 15, 2013, through August 23, 2013. The suspension in any principal capacity is in effect from July 15, 2013, through January 14, 2014.
(FINRA Case #2011025857801)
Richard D. Mellema was previously registered with FINRA at the following brokerage firms:
ROYAL SECURITIES COMPANY
CRD# 10702
GRAND RAPIDS, MI
01/2003 - 10/2011
This ends the information obtained on FINRA’s website.
If you have experienced a financial loss due to the sale of church bonds, call Soreide Law Group for a free consultation with an attorney at: 888-760-6552. Soreide Law Group represents clients nationwide.
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