The Financial Industry Regulatory Authority has taken disciplinary actions against a variety of financial services firms and individuals for violations of Finra rules; federal securities laws, rules and regulations; and the rules of the Municipal Securities Rulemaking Board (MSRB). Some firms or individuals were expelled, barred or suspended from conducting business. Other firms and individuals were either fined or sanctioned.
Finra is not part of the government. It’s an independent, not-for-profit organization authorized by Congress to protect America’s investors by making sure the securities industry operates fairly and honestly.
According to Finra, John Carris Investments LLC was expelled from Finra membership. The sanctions were based on Finra findings that the firm and George William Carris “willfully violated Securities Exchange Act of 1934 Section 10(b) and Rule 10b-5 thereunder by knowingly or, at a minimum, recklessly selling securities issued by the firm’s parent company on the basis of false statements of material fact and misleading omissions of material fact.”
Finra concluded the firm and Carris “committed securities fraud and defrauded customers in connection with the sale of securities issued by the firm’s parent company by failing to disclose the poor financial condition of the firm and its parent company, failing to disclose that Carris used firm funds for personal expenses, and misleading investors regarding the parent company’s financial condition by paying dividends to the parent company’s early investors with funds contributed by new investors.”
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Carris was barred from association with any Finra member firm in any capacity.
Additionally, Andrey V. Tkatchenko, a registered representative at John Carris Investments, was assessed a deferred fine of $10,000 and suspended from association with any Finra member in any capacity for two years. Jason Christian Barter, head trader at John Carris Investments, was assessed a deferred fine of $5,000, suspended from association with any Finra member in any capacity for 18 months, and required to requalify by examination as a registered representative.
Without admitting or denying the allegations, the firm and Major consented to the sanctions and to the entry of findings that the firm, acting through Major, its president and chief compliance officer, conducted a securities business while failing to maintain its required minimum net capital.
The findings stated that the firm, acting through Major, had inaccurate books and records and inaccurate net capital computations and filed an inaccurate Financial and Operational Combined Uniform Single report. Major was the designated principal responsible for ensuring that the firm’s books and records were accurate. The charge against the firm alleging misleading communications with the public was dismissed. The suspension was in effect from April 20 through May 1, 2015.
Major said of his 10-day suspension: “In my opinion, it was unnecessary and unwarranted.”
To download the full listing of Finra’s May disciplinary actions report, visit www.finra.org/industry/disciplinary-actions and click on May 2015 under the “Disciplinary Action Report—Monthly” section.
—By Jim Pavia, senior editor at large