On September 15, 2015, FINRA announced that, as a result of recent focus on broker migration between risky brokerage firms and a 2014 on-site examination of Global Arena Capital Corp. (“Global Arena”), it has barred the former President of Global Arena, Barbara Desiderio, as well as David Awad, a.k.a. David Bennett, James Torres, Peter Snetzko, Alex Wildermuth, and Michael Tannen, all of whom were registered representatives, in all their capacities. Further, FINRA has barred two former Global Arena Principals, Kevin Hagan and Richard Bohack, in their principal capacities for supervisory failures, and imposed a fine against Hagan of $15,000. FINRA also sanctioned two (2) former registered representatives, Niaz Elmazi, a.k.a. Nick Morrisey, and Andrew Marzec, pursuant to a summary proceeding, for failing to cooperate with the investigation by failing to respond to requests for information. Elmazi was also permanently barred from the industry in all capacities, and Marzec was suspended. Furthermore, FINRA cancelled Global Arena’s FINRA membership in July 2015. According to each registered representative’s Letter of Acceptance, Waiver and Consent (“AWC”), FINRA charged the Global Arena registered representatives with various violations of Section 10(b) of the Securities and Exchange Act of 1934 and FINRA Rules 2010, 2111, 2020, 3110, and 8210, including misleading sales pitches, high pressure sales tactics regarding junk bonds and other securities, customer account churning and unsuitable recommendations.
Awad, Torres, Snetzko, Wildermuth, Tannen, Elmazi, and Marzec had all transferred from HFP Capital Markets LLC (“HFP”) – a brokerage firm that FINRA had previously barred from the industry, to a Global Arena branch office that was specifically opened to employ them in October 2013. FINRA notes that, “[Global Arena’s] de facto owner and three other former Global Arena brokers had been barred for fraud in a separate FINRA action related to HFP in July 2015.” FINRA revealed that the Global Arena branch office’s business model was similar to the questionable one run by HFP, in that both cold-called customers, including senior citizens, and “made solicited recommendations of securities.”
FINRA’s Executive Vice President of Regulatory Operations, Susan Axelrod, stated, “FINRA carefully monitors broker migration particularly with respect to brokers that move in groups from an expelled or high-risk firm to other securities firms, based on a variety of risk factors. FINRA will continue to leverage this data to expedite sales practice examinations and enforcement investigations to rid the industry of individuals who prey on vulnerable investors.”
In settlement, Elmazi and Marzec, two (2) Global Arena registered representatives, did not consent to entry of FINRA’s findings, but the remaining registered representatives did. However, none of them admitted or denied any of the charges.
The attorneys at Lax & Neville LLP have extensive experience in successfully prosecuting and defending claims on behalf of customers who have suffered investment losses. If you are a victim of fraud, please contact Lax & Neville LLP today at (212) 696-1999 to schedule a consultation.