FINRA Disciplinary Actions for August 2021

FINRA, a government-authorized not-for-profit organization, oversees broker-dealers in the United States. FINRA takes disciplinary actions against individuals and firms that violate FINRA rules; the rules of the Municipal Securities Rulemaking Board; and federal securities laws, rules, and regulations.

The seasoned securities fraud attorneys at Colling Gilbert Wright have substantial experience in a broad range of cases related to securities and stockbroker fraud. If you have suffered losses due to fraud, we can help. 

As part of our commitment to protecting victims of fraud, we share updates of those who have received FINRA disciplinary actions.

FINRA’s Disciplinary Actions for August 2021

1. Michael Brent Bertino (CRD #6189176, Austin, Texas)

June 15, 2021 – An AWC was issued in which Bertino was assessed a deferred fine of $10,000 and suspended from association with any FINRA member in all capacities for one year. Without admitting or denying the findings, Bertino consented to the sanctions and to the entry of findings that he improperly used funds by submitting $7,492.87 in personal travel and meal expenses for reimbursement as business expenses.

2. Dennis Domingo Cummings Perez (CRD #2923607, Mayaguez, Puerto Rico)

June 16, 2021 – An AWC was issued in which Cummings Perez was fined $5,000 and suspended from association with any FINRA member in all capacities for 45 business days. Without admitting or denying the findings, Cummings Perez consented to the sanctions and to the entry of findings that he instructed his sales assistant to use pre-signed, but otherwise blank, letters of authorization to effect transfers between customers’ accounts. The findings stated that Cummings Perez instructed his sales assistant to make the transfers after receiving instructions from the customers, a married couple who authorized the transfers. The findings also stated that Cummings Perez caused his member firm to create and maintain inaccurate books and records.

3. John Carter Braddock (CRD #1282733, Salida, Colorado)

June 17, 2021 – An AWC was issued in which Braddock was suspended from association with any FINRA member in all capacities for five months. In light of Braddock’s financial status, no monetary sanction has been imposed. Without admitting or denying the findings, Braddock consented to the sanction and to the entry of findings that he prepared and distributed a PPM that negligently misrepresented and omitted facts relevant to an investment in a private placement. 

4. Kevin Marshall McCallum (CRD #2222586, Birmingham, Alabama)

June 17, 2021 – An AWC was issued in which McCallum was assessed a deferred fine of $25,000, suspended from association with any FINRA member in all capacities for one year, ordered to pay $1,222,092.29, plus interest, in deferred restitution to customers and ordered to pay deferred disgorgement in the amount of $14,231.61, plus interest. Without admitting or denying the findings, McCallum consented to the sanctions and to the entry of findings that he made unsuitable recommendations to 12 customers, four that were over the age of 60 and seven that invested retirement funds, resulting in their overconcentration in a high-risk, publicly-traded business development company that exhibited signs of financial distress, even though the customers had low or moderate risk tolerances and investment objectives and lacked any prior experience investing in this type of company. The findings stated that McCallum’s recommendations resulted in the customers concentrating as much as approximately 17 percent to over 60 percent of their liquid net worth in the company. McCallum’s recommendations generated commissions to his member firm totaling $37,492.78, $14,231.61 of which was paid to McCallum. The company’s stock price continued to decline, and the customers began to file arbitration claims against McCallum’s firm concerning his recommendations of the company, which precipitated FINRA’s investigation. A customer who realized losses from the sale of her positions obtained payment from the firm in connection with resolving her arbitration claims. Four other customers sold their positions and realized losses totaling $1,222,092.29.

5. Eric Peter Burton (CRD #3113849, Oak Brook, Illinois)

June 22, 2021 – An AWC was issued in which Burton was fined $5,000 and suspended from association with any FINRA member in all capacities for three months. Without admitting or denying the findings, Burton consented to the sanctions and to the entry of findings that he falsified variable annuity replacement disclosure forms that he submitted to his member firm.  The findings also stated that Burton caused his firm to maintain inaccurate books and records.

6. Robert Brandon Prettyman (CRD #5613767, Bear, Delaware)

June 22, 2021 – An AWC was issued in which Prettyman was fined $5,000 and suspended from association with any FINRA member in all capacities for one month. Without admitting or denying the findings, Prettyman consented to the sanctions and to the entry of findings that he reused customers’ signatures on documents for account openings and transactions, including distribution requests, and, on certain documents, altered the signature date and/or other information with ink and correction fluid. The findings stated that Prettyman then submitted the documents to his member firm. The underlying transactions were all authorized and none of the customers complained.

7. Danielle Matson (CRD #4140827, Mound, Minnesota)

June 23, 2021 – An AWC was issued in which Matson was fined $2,500 and suspended from association with any FINRA member in all capacities for 21 days. Without admitting or denying the findings, Matson consented to the sanctions and to the entry of findings that she entered false customer information into her member firm’s customer account profile system, thereby causing the firm to maintain inaccurate books and records. 

8. Kelly Wayne Feehrer (CRD #1470328, Cleveland, Tennessee)

June 25, 2021 – An AWC was issued in which Feehrer was fined $5,000 and suspended from association with any FINRA member in all capacities for three months. Without admitting or denying the findings, Feehrer consented to the sanctions and to the entry of findings that he engaged in an unsuitable pattern of short-term trading of unit investment trusts (UITs) in customer accounts. The findings stated that Feehrer recommended that customers roll over UITs prior to their maturity date. On certain of those occasions, Feehrer recommended that his customers roll over a UIT before its maturity date in order to purchase a subsequent series of the same UIT that generally had the same or similar investment objectives and strategies as the prior series. Feehrer’s recommendations caused his customers to incur unnecessary sales charges and were unsuitable in view of the frequency and cost of the transactions. 

9. Scott Ryland Mathews (CRD #1314735, Calabash, North Carolina)

June 25, 2021 – An AWC was issued in which Mathews was assessed a deferred fine of $5,000 and suspended from association with any FINRA member in all capacities for three months. Without admitting or denying the findings, Mathews consented to the sanctions and to the entry of findings that he engaged in an unsuitable pattern of short-term trading of UITs in customer accounts. The findings stated that Mathews recommended that his customers roll over UITs prior to their maturity and use the proceeds to purchase a new UIT. Of those early rollovers, on certain occasions, Mathews recommended that his customers roll over a UIT before its maturity date in order to purchase a subsequent series of the same UIT, which generally had the same or similar investment objectives and strategies as the prior series. Mathews’ recommendations caused his customers to incur unnecessary sales charges and were unsuitable in view of the frequency and cost of the transactions.

10. Adam James Makkai (CRD #4025159, Castle Rock, Colorado)

June 28, 2021 – Makkai appealed an OHO decision to the NAC. Makkai was fined $2,000 and suspended from association with any FINRA member in all capacities for 10 business days. The sanctions were based on findings that Makkai improperly paid commissions to an unregistered person. 

11. Elizabeth Ann Sollars (CRD #6606776, West Terre Haute, Indiana)

June 7, 2021 – Sollars was named a respondent in a FINRA complaint alleging that she failed to provide information and documents and failed to appear and provide on-the-record testimony requested by FINRA in connection with its investigation into allegations that she misappropriated insurance customer premium payments. 

12. Marc Augustus Reda (CRD #2757330, New York, New York)

June 15, 2021 – Reda was named a respondent in a FINRA complaint alleging that he willfully violated Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5 and violated FINRA Rule 2020 by churning in customer accounts. The complaint alleges that Reda exercised de facto control of the trading in, and made the trading decisions for, customers’ accounts. The customers relied on Reda to make securities recommendations and consistently followed those recommendations. Reda also exercised control in instances when he made unauthorized transactions in the customer accounts. The complaint also alleges that Reda recommended securities transactions in the customers’ accounts that were excessive and quantitatively unsuitable for each of the customers in light of their investment profiles.  

13. Blair Edwards Olsen (CRD #1545765, Carefree, Arizona)

June 16, 2021 – Olsen was named a respondent in a FINRA complaint alleging that he willfully failed to amend and to timely amend his Form U4 to disclose, or to timely disclose, criminal felony charges. The complaint alleges that Olsen was indicted on seven counts of aggravated harassment. Olsen failed to inform his member firm of his arrest or the felony charges in the indictment. The firm learned of the indictment when a customer contacted them after learning on the internet that Olsen had been arrested. In addition, Olsen was indicted in a new criminal matter with one count of aggravated harassment. Olsen amended his Form U4 on multiple occasions, but they were incomplete and inaccurate because he failed to disclose that he had been charged with the felony in the second indictment. 

14. Michael John Giovannelli (CRD #4989449, North Massapequa, New York)

June 17, 2021 – Giovannelli was named a respondent in a FINRA complaint alleging that he made unauthorized transactions in a senior customer’s non-discretionary account. The complaint alleges that the unauthorized trades generated trading costs of approximately $2,281, including $1,380 in commissions, and caused $1,494 in realized losses. The customer filed a complaint with Giovannelli’s member firm concerning the trading in his account and after investigating the matter, the firm reversed the unauthorized trades and discharged Giovannelli. The complaint also alleges that Giovannelli provided false documents to FINRA in connection with its investigation into his unauthorized trading in the customer’s account. 

15. StockKings Capital LLC (CRD #164445, New York, New York) and Gregory Antonius Lewis (CRD #2793976, St. Petersburg, Florida)

June 28, 2021 – The firm and Lewis were named respondents in a FINRA complaint alleging that they created and transmitted investment materials that made false, exaggerated, misleading, promissory and unwarranted claims about the firm, its majority owner company and a platform they were purportedly developing. The complaint alleges that in these documents, the firm and Lewis falsely claimed they had received a patent, overstated the progress the firm had made toward bringing its platform to market, falsely claimed the firm’s platform was stalled due to a FINRA materiality consultation and made baseless and unwarranted valuation claims and revenue projections. The complaint also alleges that the firm willfully violated Section 17(a) of the Exchange Act and Rules 17a-3 and 17a-5 thereunder by failing to maintain accurate books and records and FOCUS reports, and that Lewis caused the firm to maintain inaccurate books and records, which were in turn used to create FOCUS reports that inaccurately understated his compensation and overstated the firm’s expenses. Lewis caused the firm to misclassify more than $42,000 of his personal expenses as business expenses of the firm on its general ledger and in other of the firm’s books and records and directed the firm’s FINOP to classify Lewis’ personal expenses as business expenses of the firm. The complaint further alleges that the firm failed to make all of the required disclosures with respect to the intended use of proceeds, offering expenses and the amount of selling compensation to be paid in its offering documents and, relatedly, failed to timely file offering documents with FINRA.

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