America Northcoast CCO Barred For Aiding Stockbroker’s Fraud
Christopher Richard Barone of Houston Texas the President and Chief Compliance Officer of America Northcoast Securities Inc. has been fined $60,000.00 and barred by Securities and Exchange Commission (SEC) from being a stockbroker or investment adviser representative or otherwise associating with securities broker dealers or investment advisories based upon findings that Barone caused unsuitable and unauthorized transactions to be effected in the accounts of America Northcoast Securities customers. In the Matter of Christopher Barone Administrative Proceeding File No. 3-19947 (Aug. 27, 2020).
According to the Order, Barone was America Northcoast’s President and Chief Compliance Officer between July of 1999 and August of 2017. During this period, Barone’s brother-in-law Dominic Tropiano effected leveraged exchange traded fund trades in America Northcoast customer accounts on an unauthorized and unsuitable basis.
The Order stated that between May of 2015 and April of 2016, Tropiano did not maintain any registration as a stockbroker of America Northcoast but still managed to solicit and initiate trades in 66 customer accounts. Those accounts had come from another securities broker dealer in which Tropiano was previously associated. The Order stated that Barone knew about red flags facing Tropiano yet helped him make unsuitable and unauthorized trades.
SEC determined that Barone aided and abetted Tropiano’s violations of Securities Exchange Act of 1934 Section 10(b), SEC Rule 10b-5 and Securities Act of 1933 Section 17(a). SEC found that Barone also aided and abetted violations of Exchange Act Section 15(b)(7) and Rule 15b7-1 by America Northcoast.
Barone has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity supported by findings that he had misrepresented information relating to trade reporting responsibilities and had provided altered documents to FINRA during its investigation into his activities at America Northcoast. Letter of Acceptance Waiver and Consent No. 2016050912001 (Jan. 23, 2020). According to the AWC, Barone’s altering of documents and misrepresentations were violative of FINRA Rules 2010 and 8210.
FINRA Public Disclosure reveals that Barone has been identified in six customer initiated investment related disputes containing allegations of his misconduct while employed by America Northcoast. On August 4, 2017, a customer initiated investment related arbitration claim concerning Barone’s conduct was resolved for $60,000.00 in damages founded on accusations including breach of contract and fraud relating to leveraged ETF sales. FINRA Arbitration No. 16-02370. According to the claim, unsuitable and unauthorized trades were made in the customer’s account. The claim also alleges supervisory failures.
Barone has also been referenced in a customer initiated investment related arbitration claim which was settled for $242,000.00 in damages based upon allegations including the failure to supervise the stockbroker who traded leveraged exchange traded funds in the customer’s account. FINRA Arbitration No. 17-01026 (Aug. 2, 2017). The claim alleges that transactions were not suitable and that a fiduciary duty was violated.
On January 19, 2018, another customer initiated investment related arbitration claim involving Barone’s activities was resolved for $70,000.00 in damages supported by accusations of negligence and unauthorized trading of leveraged exchange traded funds. FINRA Arbitration No. 17-00156. According to the claim, the customer’s account lacked supervision which led to the customer’s losses.
Barone’s registration with America Northcoast Securities has been terminated as of August 2, 2017.