Finra expels firm for 'brazen' defiance of SEC

SRO claims banned boss continued to run EKN Financial as shadow CEO

Oct 18, 2012 @ 2:56 pm

By Andrew Osterland

The Financial Industry Regulatory Authority Inc. on Thursday expelled investment firm EKN Financial Services Inc. for “numerous compliance violations.” Finra also barred shadow CEO Anthony Ottimo from the securities industry for life.

The regulator accused the Melville, N.Y.-based firm of widespread reporting failures and net-capital deficiencies, as well as numerous violations of Finra and federal securities laws, including provisions governing money laundering.

It said that executive Anthony Ottimo continued to act as chief executive at the firm despite being barred from doing so by the Securities and Exchange Commission in 2008. Finra has now banned Mr Ottimo from the industry and suspended EKN's president, Thomas Giugliano, for a year and fined him $150,000.

“EKN, Ottimo and Giugliano's defiance of an SEC order and subsequent lies to regulators were nothing short of brazen,” Finra chief of enforcement Brad Bennett said in a news release. “In addition to hiding the fact that Ottimo was acting as CEO, the firm was also fully aware they had significant [anti-money-laundering] problems and net-capital deficiencies, yet completely ignored any sense of responsibility to follow securities rules and laws.”

EKN's record on the Finra BrokerCheck database is peppered with disciplinary actions initiated by the self-regulatory organization, the SEC and five different state securities regulators. The SEC order against EKN in 2008, in which Mr. Ottimo was barred from serving as CEO, alleged that the firm had defrauded mutual funds in which some of its customers had invested.

EKN and the two executives neither admitted nor denied the Finra charges but consented to the findings, according to the press release. A secretary at the firm said no one was available to comment on the Finra settlement.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

INTV

Diversity & Inclusion Awards: 2018 nominations are open

Editor Fred Gabriel and special projects editor Liz Skinner discuss the nomination process for InvestmentNews' inaugural Diversity & Inclusion awards.

Latest news & opinion

Cetera reportedly exploring $1.5 billion sale

The company confirmed it's talking to investment bankers to 'explore how to best optimize [its] capital structure at lower costs.'

SEC Chairman Jay Clayton outlines goals for a new fiduciary standard

Rule should provide clarity on role of adviser, enhanced investor protection and regulatory coordination.

Advisers bemoan LPL's technology platform change

Those in a private LinkedIn chat room were sounding off about fears the independent broker-dealer will require a move to ClientWorks before it is fully ready.

Speculation mounts on whether others will follow UBS' latest move to prevent brokers from leaving

UBS brokers must sign a 12-month non-solicit agreement if they want their 2017 bonuses.

8 apps advisers love for getting stuff done

Smartphone apps that advisers are using in 2018 to run their business more efficiently.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print