The Financial Industry Regulatory Authority barred an ex-Mutual of Omaha Investor Services broker who allegedly had engaged in unapproved business outside the company using Bitcoin and then refused to cooperate with FINRA’s investigation of that activity.
Without admitting or denying the findings, Ramon Esparza signed a FINRA letter of acceptance, waiver and consent Dec. 13 in which he agreed to be barred from associating with any FINRA member in any capacity. The letter was accepted by FINRA Dec. 20.
Meyer registered with FINRA in October 2014 through his association with Mutual of Omaha, according to the letter. He entered the securities industry in 2010 and was associated with one FINRA member firm before Mutual of Omaha, according to the letter. However, his profile on FINRA’s BrokerCheck website cites Mutual of Omaha as the one and only FINRA member firm he was ever associated with.
On Aug. 7, 2019, Mutual of Omaha filed a Uniform Termination Notice of Securities Industry Registration (Form U5) on Esparza’s behalf, stating that, five days earlier, Esparza voluntarily resigned after the firm started an internal review relating to allegations that he “received cash and transacted business in Bitcoin” and concluded that he “engaged in unapproved outside business activities involving Bitcoin transactions,” FINRA said, quoting Mutual of Omaha.
About one month later, on Sept. 20, FINRA staff sent a request to Esparza for the production of information and documents, pursuant to FINRA Rule 8210.
FINRA Rule 8210(a)(1) states that FINRA has the right to “require a … person associated with a member, or any other person subject to FINRA’s jurisdiction to provide information orally, in writing, or electronically and to testify at a location specified by FINRA Staff, under oath or affirmation with respect to any matter involved in the investigation, complaint, examination or proceeding.”
On Nov. 1, Esparza provided some of the requested information and documents, but failed to provide all the requested materials, according to FINRA. On Nov. 12, FINRA staff sent another request to Esparza for the materials he failed to provide and for additional information and documents, it said. Esparza, however, failed to provide any information or documents by the due date of Nov. 26, FINRA said. On Dec. 2, FINRA staff sent another request for the information and documents FINRA previously requested, it noted.
Esparza then stated in a telephone call with FINRA staff Dec. 9 and through the FINRA letter that he acknowledged he received all of FINRA’s requests and won’t produce the requested information or documents at any time, it said in the letter.
By refusing to produce the information and documents requested pursuant to FINRA Rule 8210, Esparza violated that rule as well as 2010, which requires FINRA members to “observe high standards of commercial honor and just and equitable principles of trade.”
Esparza was not associated with any FINRA member firm at the time it signed the letter. But his personal LinkedIn profile still listed him as an insurance advisor at Mutual of Omaha as of Thursday. He and Mutual of Omaha didn’t immediately respond to requests for comment. There was no attorney for Esparza included on the letter.
— Check out FINRA Fines 5 Big Firms for ‘Know Your Customer’ Failures on ThinkAdvisor.