A federal judge has found vocal Finra critic Richard Goble guilty of engaging in an improper customer-reserve transaction in a bid to keep his struggling clearing firm afloat.
In a decision issued yesterday, U.S. District Judge Mary S. Scriven of the Middle District of Florida in Orlando, permanently barred Mr. Goble from the securities industry and ordered him to pay a $7,500 fine. His firm, North American Clearing Inc., was shut down the Securities and Exchange Commission in May 2008.
The charge against Mr. Goble was lodged by the SEC, which had been seeking a $130,000 fine.
A bench trial before Judge Scriven was held in May 2010.
“The judge found [Mr. Goble] didn't touch any of the money,” said Mr. Goble's attorney, Robert Sirianni of the Brownstone PA law firm.
The guilty finding involved a single transaction from May 13, 2008, Mr. Sirianni noted.
He said he and Mr. Goble were considering an appeal.
Judge Scriven said Mr. Goble was behind that particular May 2008 transaction, which she called a “sham” sale of $5 million in customer money market funds. The sale freed up $3.4 million from North American's customer reserve account, which Mr. Goble then had wired to the firm's settlement account.
“Even as late as the trial in this matter, Goble insists that he is blameless and denies the import of his conduct vis-à-vis the patently fraudulent May 13, 2008, transaction,” Judge Scriven said in her decision. “Although his licenses have all expired and the likelihood of his acquiring future licensing is slim, the court finds that a court-imposed injunction would provide a further disincentive for Goble to attempt to secure a license or attempt to engage in the securities business under the licenses of others.”
Robert Levenson, one of the SEC attorneys in Miami who prosecuted the case, said, “We're pleased the judge agreed with [our complaint], that Goble violated the securities laws, and saw fit to enjoin him and ban him from holding a securities license.”
Mr. Goble was a well-known critic of regulators. An industry group he co-founded, the Financial Industry Association, had some success in running independent candidates for the board and district committees of the
Financial Industry Regulatory Authority Inc.
In 2007, Mr. Goble won a spot on the Finra board. After the SEC charged him in 2008, he resigned his seat.
A court-appointed receiver liquidated North American, which at one time cleared trades for about 40 small broker-dealers.
