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

Events

How 401(k) advisers can use 'centers of influence' to grow their business

Leveraging relationships with accounting, benefits, and property and casualty insurance firms can help deliver new business leads for retirement plan advisers.

Latest news & opinion

Things are looking up: IBDs soared in 2017

With revenue up, interest rates rising and regulation easing, IBDs are soaring.

SEC advice rule may give RIAs leg up over broker-dealers

Experts say advisers will be able to point to their role as fiduciaries as a differentiator in the advice market.

Brokers accept proposed SEC rule on who can call themselves an adviser

Some say the rule will clear up investor confusion, but others say the SEC didn't go far enough.

SEC advice rule: Here's what you need to know

We sifted through the nearly 1,000-page proposal and picked out some of the most important points.

Cadaret Grant acquired by private-equity-backed Atria

75-year-old owner Arthur Grant positions the IBD for the 'next 33 years.'

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