Carlos Javier Legaspy of Highland Park Illinois the President and Chief Executive Officer of Insight Securities Inc. is referenced in a customer initiated investment related arbitration claim where the customer requested $2,765,000.00 in damages based upon accusations that while Legaspy was associated with Insight Securities Inc.: (1) customers were presented with fraudulent documents to effect investment-related transfers and (2) Legaspy negligently supervised the customers’ investment transactions by failing to identify signs that the customer was being defrauded and placed into notes that are now worthless. Financial Industry Regulatory Authority (FINRA) Arbitration No. 19-00474 (Feb. 13, 2019).

FINRA Public Disclosure reveals that Legaspy has been referenced in two additional customer initiated investment related disputes containing allegations of his misconduct while he has been associated with Insight Securities. In particular, on August 13, 2018, a customer filed an initiated investment related arbitration claim involving Legaspy’s activities in which the customer sought $2,386,452.00 in damages supported by accusations that the customer’s assets, which were managed by outside parties, had been relocated to another bank through a fraudulent arrangement; and Legaspy and Insight Securities Inc. failed to identify and address the suspicious transactions. FINRA Arbitration No. 18-02781 (Aug. 13, 2018).

Thereafter, customers filed an initiated investment related arbitration claim concerning Legaspy’s conduct where they collectively requested $6,000,000.00 in damages based upon allegations of Legaspy’s negligence in connection with the fraudulent transfers of customers’ assets. FINRA Arbitration No. 19-00137 (Jan. 11, 2019).

Rule 3012 regarding the establishment of a Supervisory Control System specifically requires all firms: to establish, maintain and enforce written supervisory control policies and procedures that, among other things, include procedures that are reasonably designed to review and monitor the transmittal of funds (e.g., wires or checks) or securities:

•   from customer accounts to third-party accounts (i.e., a transmittal that would result in a change of beneficial ownership);

•   from customer accounts to outside entities (e.g., banks, investment companies);

•   from customer accounts to locations other than a customer’s primary residence (e.g., post office box, “in care of” accounts, alternate address); and

•   between customers and registered representatives (including the hand-delivery of checks).

NASD Rule 3012 (Supervisory Control System) and Incorporated NYSE Rule 401, See also, Regulatory Notice 09-64 (Nov. 2009)(“FINRA firms must have and enforce policies and procedures governing the withdrawal or transmittal of funds or assets from customer accounts, including instructions froman investment adviser or other third party purporting to act on behalf of the customer”); FINRA Regulatory Notice 12-05 (Jan. 2012)(“firms must have adequate policies and procedures to review and monitor all disbursements it makes from customers’ accounts, including but not limited to third-party accounts, outside entities or an address other than the customer’s primary address”); FINRA Department of Enforcement v. Ameriprise, Letter of Acceptance Waiver & Consent, No. 2010-02515730 (March 1, 2013)(Ameriprise fined $750,000 for Failing to Supervise and have reasonable supervisory systems in place to monitor wire transfer requests and the transmittal of customer funds to third-party accounts)(Exhibit “I”).

FINRA also suggests that a firm’s policies and procedures should include procedures that are reasonably designed to, among other things: verify that any third party who purports to be acting on behalf of a customer, including any family member, third-party investment advisor or money manager, has been authorized by the customer to take the action in question,” and that “this typically, requires firms to verify that a valid power of attorney has been executed by the customer and that actions taken by the third party are within the scope of the authority conveyed.” Regulatory Notice 09-64 at 3 (Nov. 2009).

Legaspy has been associated with Insight Securities, Inc. since June 20, 2002.

The information contained herein has been obtained from reliable sources however may not be accurate and is not guaranteed by us. Readers are encouraged to undertake their own independent investigation and evaluation of the relevant facts. All claims and allegations are subject to adjudication, decisions may be subject to appeal, and no inference is intended, nor should any inference be made from any information contained herein from any source.

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Guiliano Law Group, P.C.

Our practice is limited to the representation of investors. Over the last three decades, we have recovered more than a hundred million dollars for more than 1,000 injured investors from all over the United States and several foreign countries. We accept representation purely on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a confidential consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.

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