In May 2010, the Financial Industry Regulatory Authority ordered Los Angeles-based Westpark Capital to pay $400,000 for supervisory failures. FINRA suspended two Westpark officers for failing to supervise brokers in two Long Island, New York offices who churned customer accounts and made unauthorized and unsuitable trades.
FINRA suspended Westpark’s Chief Compliance Officer and Chief Operations Officer.
FINRA barred and/or fined two brokers and a branch manager from the same offices, and filed a complaint against another broker, charging him with churning. Two additional Westpark brokers already have been barred by FINRA or the Securities and Exchange Commission for misconduct at other firms.
Several of the brokers involved came to Westpark from firms that had lengthy disciplinary records and that FINRA has expelled from the securities industry. At the time Westpark hired them, several of the brokers had histories that included multiple customer complaints and/or disciplinary actions.
FINRA found that Westpark failed to restrict the activities of certain brokers and failed to monitor customer accounts, even though the brokers had disciplinary histories and customer complaints that included unauthorized, unsuitable, and excessive trading.
Westpark inadequately monitored excessive trading and failed to prescribe any steps that would be taken if excessive trading were suspected.
The firm assigned supervisory responsibility to branch office managers, even though the managers were inexperienced or had previously been disciplined for failure to supervise.
FINRA also found that Westpark placed the brokers on heightened supervision, but failed to supervise several brokers who committed serious sales practice violations – including unauthorized, unsuitable, and excessive trading involving at least 19 customer accounts.
Branch Manager Robert A. Bellia, Jr. was barred from working with a brokerage firm as a principal. FINRA found that Bellia failed to supervise three Westpark brokers who churned and made unsuitable and unauthorized trades in customer accounts.
Dale R. Menendez, Jr. was barred permanently from the securities industry and ordered to pay over $110,000 in restitution. FINRA found that Menendez made excessive and unauthorized trades, mischaracterized customer transactions to his firm and failed to appear for testimony during the FINRA investigation.
Michael Quattalaro was barred from the securities industry. FINRA found that he made excessive and unsuitable trades in customer accounts and exercised discretion without prior written customer authority.
Chanse K. Menendez, Sr. has been charged with excessive trading and churning in customer accounts. The complaint also alleges that he mischaracterized “solicited” trades as “unsolicited” trades in an apparent attempt to conceal his misconduct. The complaint also alleges that Menendez failed to appear for testimony and provide documents to FINRA.
Dimond Kaplan & Rothstein, P.A. represents investors in New York, Miami, South Florida and throughout the United States in stockbroker misconduct and securities fraud cases.