Finra expels ‘brazen’ firm

The Financial Industry Regulatory Authority Inc. last Thursday expelled investment firm EKN Financial Services Inc. for “numerous compliance violations.”

Finra also barred former chief executive Anthony Ottimo from the securities industry for life.

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

Finra 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 him from the industry and suspended EKN’s president, Thomas Giugliano, for a year and fined him $150,000.

WILLFUL DEFIANCE

“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 statement. “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 chief executive, 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 statement.

A secretary at the firm said that no one was available to comment on the Finra settlement.

[email protected] Twitter: @aoreport

Related Topics: Financial Industry Regulatory Authority, Securities and Exchange Commission