Russel W. Newton, of Westport, Connecticut, a stockbroker formerly registered with Source Capital Group, Inc., has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity based upon consenting to findings that he failed to cooperate with FINRA in an investigation into allegations of his misconduct, which included possible securities laws violations. Letter of Acceptance, Waiver and Consent, No. 2016050892601 (July 28, 2017).

According to the AWC, Newton was sent a request from FINRA, according to Rule 8210, that called upon him to provide recorded testimony based on Rule 8210. However, it was made clear on May 19, 2017, that Newton would not be providing recorded testimony at any point for FINRA staff. Consequently, Newton’s failure to cooperate was conduct found by FINRA to be violative of Rules 2010 and 8210, resulting in his permanent bar.

This is not the first regulatory infraction that Newton has been exposed to. Particularly, he was fined $180,000.00, censured and suspended by National Association of Securities Dealers (NASD) based upon consenting to findings that he enabled registered representatives to utilize misleading sales scripts in procuring business from customers. Letter of Acceptance, Waiver and Consent, No. C1199DD37 (Sept. 8, 1999). Apparently, the scripts lacked critical information regarding mark-downs and mark-ups on transactions, pricing of transactions, and the firm’s role in the transaction. Newton’s conduct, which included his failure to supervise the firm’s operations, was found by NASD to be violative of Securities and Exchange (SEC) Rule 10b-10, as well as NASD Rules 3010, 2210, and 2110.

Further, on August 21, 2001, he was subject of a Utah Division of Securities Stipulation and Consent Order, which resulted in a $25,000.00 fine and the revocation of Newton’s securities registration based upon allegations against him including failing to supervise, effecting unregistered securities sales, and engaging in a fraudulent securities scheme. Case No. SD-01-0112 (Aug. 21, 2001).

Financial Industry Regulatory Authority (FINRA) Public Disclosure reveals that Newton has been identified in four customer initiated investment related disputes containing allegations of his misconduct while employed with Merit Capital Associates and Source Capital Group, Inc. Particularly, on January 3, 2008, a customer filed an investment related civil action involving Newton’s conduct, based upon allegations including misrepresentation, infliction of emotional distress, negligence, breach of fiduciary duty, promissory estoppel, unjust enrichment, breach of contract, and fraud concerning private placements and stock transactions effected in the customer’s investment account.

Between July 5, 2015, and December 15, 2015, three customer initiated investment related arbitration claims pertaining to Newton’s conduct were settled for a total of $67,000.00 in damages based upon allegations of the failure to properly supervise oil & gas and direct investment product transactions effected in customers’ investment accounts through Newton.

Guiliano Law Firm

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For more information concerning common claims against stockbrokers and investment professionals, please visit us at stockbrokerfraud.com

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