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January 24, 2020 at 04:36 PM
The Financial Industry Regulatory Authority barred one representative and suspended two others who allegedly forged documents in separate cases, according to the regulator.
Without admitting or denying the findings, Wesley K. Omoto, Christopher R. Barone and Thomas J. Crossett each signed a FINRA letter of acceptance, waiver and consent in which they agreed to the sanctions imposed on them by FINRA.
Omoto signed his letter Jan. 16, agreeing to a two-month suspension from FINRA firms and a $5,000 fine. Barone signed his letter Dec. 30, agreeing to be barred from association with any FINRA firm in any capacity. Crossett signed his letter Jan. 7, agreeing to a three-month suspension and a $5,000 fine. FINRA accepted all three letters Thursday.
Over his more than 31 years in the industry, Omoto was associated with three firms before joining Ameritas Investment Corp. in August 1998, according to FINRA. On Feb. 26, 2018, Ameritas filed a Form U5 reporting that Omoto was permitted to resign three days earlier while under review for his failure to adhere to firm signature policies, specifically “repurposing of clients’ signatures,” the FINRA letter said.
Omoto, “while associated with Ameritas, falsified records by cutting and pasting signatures of two customers on forms as part of variable annuity transactions,” violating FINRA Rule 2010. In addition, through his conduct, Omoto caused Ameritas to make and preserve inaccurate books and records in violation of FINRA Rules 4511 and 2010, according to the FINRA letter.
Ameritas and Omoto’s lawyer, Jeremy L. Bartell of Bartell Law in Washington, D.C., declined to comment.
Meanwhile, Barone became associated as a general securities principal and general securities representative with FINRA member America Northcoast Securities in July 1999. Barone then became associated with America Northcoast as a municipal securities principal in February 2003, FINRA said. However, his association with America Northcoast was terminated in August 2017 when the firm terminated its membership with FINRA.
Between December 2016 and July 2017, Barone made misrepresentations to FINRA about the frequency of his supervision of his firm’s trade reporting responsibilities, and altered documents that he produced to FINRA, the regulator alleged. Through this conduct, Barone violated FINRA Rules 8210 and 2010, FINRA said.
Between Jan.1, 2016 and July 1, 2017, Barone was America Northcoast’s president and chief compliance officer. The firm’s written supervisory procedures required the CCO to conduct a monthly review of the firm’s trade reporting responsibilities to ensure compliance with applicable rules. “For various reasons, however, Barone was only completing this responsibility three or four times a year,” according to FINRA.
During the second half of 2016, FINRA conducted two inquiries pertaining to America Northcoast’s compliance with its trade reporting responsibilities. One of these inquiries pertained to the firm’s reporting of municipal securities transactions to the Municipal Securities Rulemaking Board. On Nov. 29, 2016, FINRA requested that America Northcoast produce documents and information regarding the firm’s failure to report 47 municipal transactions within 15 minutes of trade execution over a three-month period in 2016, FINRA said. The inquiry letter included a request that the firm produce “[c]opies of any and all documents evidencing that supervisory review of trade reporting compliance of municipal securities was conducted during the review period,” it said, noting Barone was “solely responsible for preparing the firm’s response.”
In a Dec. 20, 2016 letter, however, Barone “falsely represented” that he “reviewed these trades monthly to make sure we are not reporting late” to MSRB. “In fact, Barone was reviewing the firm’s municipal trade reporting only on, at most, a quarterly basis,” FINRA said.
Barone also produced three MSRB spreadsheets that “purportedly evidenced his supervisory reviews, but before doing so, he altered the documents in two important ways,” FINRA said, explaining: “First, he removed the ‘search date’ on the document, which was evidence of when Barone had actually conducted the review. Second, he added a different date and his initials.”
