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

Featured video

INTV

Financial health of advisory firms is excellent. Or is it?

Deputy editor Bob Hordt and senior columnist Jeff Benjamin discuss the fact that double-digit growth in revenue and assets doesn't necessarily spell a rosy future.

Latest news & opinion

Don't be fooled by the numbers — the industry is in a dangerously vulnerable state

Last year's stock market gains helped advisers turn in solid growth in assets and revenue, but that growth could disappear in the next market downturn.

Divided we stand: How financial advisers view President Trump

InvestmentNews poll finds 49.2% approve of his performance, while 46.7% disapprove. How has that changed over the course of his presidency?

10 states with the most college student debt

Residents of these states have the most student debt when you consider their job opportunities.

Ex-Wells Fargo brokers sue for damages, claiming they lost business in wake of scandals

In a Finra arbitration complaint, two brokers allege that Wells Fargo's problems damaged their business.

Invesco to buy OppenheimerFunds

Deal brings Invesco another $246 billion in assets, as well as high-fee actively managed funds.

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