The Financial Industry Regulatory Authority (FINRA) today announced that it has expelled EKN Financial Services, Inc. of Melville, NY, for numerous compliance violations and for allowing its CEO, Anthony Ottimo, to act as a supervisor after being barred from acting in that capacity by the Securities and Exchange Commission (SEC) in June 2008. FINRA barred Ottimo from the securities industry and barred the firm’s former President, Thomas Giugliano, from acting in a principal capacity, suspended him from the securities industry for one year and fined him $150,000. EKN, through Ottimo and Giugliano, also violated numerous NASD/FINRA and SEC rules and federal securities laws, including anti-money laundering (AML) violations, net capital deficiencies and widespread reporting failures…
In addition, FINRA found that EKN, Ottimo and Giugliano, who was aware of EKN and Ottimo’s regulatory violations, committed numerous AML violations, including failing to establish an adequate AML compliance program to detect and report suspicious activity. For instance, EKN customers attempted to inject several hundred million dollars of bogus bonds into the U.S. financial system, but the firm failed to detect “red flags” suggesting possible suspicious activity. Moreover, EKN failed to meet minimum net capital requirements during certain periods from September 2008 to November 2010, and also prepared inaccurate net capital computations, failed to accurately report its net capital deficiencies to the SEC and FINRA, and failed to accurately record expenses and liabilities in its books and records. EKN also failed to report to FINRA, which would have made this information publicly available through FINRA BrokerCheck, that Ottimo and Giugliano each had hundreds of thousands of dollars in unsatisfied judgments and liens.
FINRA press release link: click here