Securities Lawyers Blog
The Financial Industry Regulatory Authority (FINRA) recently barred LPL Financial, LLC (LPL) broker Reniero Francisco (Francisco) concerning allegations that the broker failed to cooperate with FINRA’s investigation of Francisco’s involvement with Arista LLC, a registered Commodity Pool Operator (CPO) with its principal place of business in Newport Coast, California. An order was entered on December 3, 2013, requiring Francisco and other parties to pay more than $8.25 million in restitution for the losses of defrauded investors. FINRA requested information from Francisco and also scheduled him to testify but Francisco failed to respond to FINRA’s requests for information and documents and also failed to appear for testimony.
In December 2012, the U.S. Commodity Futures Trading Commission (CFTC) brought action against Arista and Arista’s principals, Abdul Sultan Walji (a/k/a Abdul Sultan Valji) of San Juan Capistrano, California, and Francisco alleging that they carried out a fraudulent scheme to misappropriate millions of investors’ money through commodity futures and options, making false statements to the CFTC, and filing false quarterly reports with the National Futures Association (NFA).
Shortly thereafter, Judge Paul A. Engelmayer of the U.S. District Court for the Southern District of New York entered a consent judgment and permanent injunction order against Arista, Walji, and Francisco. The order requires the defendants to pay more than $8.25 million in restitution for the investor losses. In addition, the order imposed civil monetary penalties of $6.45 million on Walji, $5.925 million on Francisco, and $1.54 million on Arista. The order also permanently bans defendants from trading activity and prohibits them from violating provisions of the Commodity Exchange Act (CEA) and a CFTC regulation.