The Financial Industry Regulatory Authority (“FINRA”) has expelled brokerage firm EKN Financial Services Inc. for “numerous compliance violations.” FINRA also barred EKN’s CEO, Anthony Ottimo, from the securities industry for life for continuing to act as CEO after the Securities and Exchange Commission (“SEC”) banned him from acting in such a capacity. This conduct is emblematic of the utter disregard that many brokerage firms have for securities regulators. Ultimately, such conduct reflects a callous indifference for the fiduciaries duties owed to investors and this type of attitude at some brokerage firms often leads to incidents of investment fraud and stockbroker misconduct.
FINRA accused EKN of widespread reporting failures and net-capital deficiencies, as well as numerous violations of FINRA rules and federal securities laws, including provisions governing money laundering. In addition, Mr. Ottimo is accused of continuing to act as EKN’s chief executive despite being barred from doing so by the SEC in 2008. FINRA has banned Mr. Ottimo from the securities industry and suspended EKN’s president, Thomas Giugliano, for a year and fined him $150,000.
The SEC order against EKN in 2008, in which Mr. Ottimo was barred from serving as CEO, was the result of allegations that EKN had defrauded mutual funds in which some of its customers had invested.