Santander Securities Barred By FINRA For Obstruction
Demitrios Hallas, of New York, New York, a stockbroker formerly registered with Santander Securities, has been barred from associating with any Financial Industry Regulatory Authority (FINRA) member in any capacity according to an Office of Hearing Officers Default Decision containing findings that he failed to cooperate with a FINRA investigation into allegations of his misconduct as alleged within customer complaints. Department of Enforcement v. Demitrios Hallas, No. 2015047828802 (Nov. 2, 2017).
According to the Decision, Santander informed FINRA on May 8, 2016, that a customer filed a complaint with the firm in October of 2015, where the customer sought $14,000.00 in damages supported by accusations that Hallas made unsuitable investment recommendations to the customer in regard to a variable annuity.
Evidently, FINRA sought information and documentation from Hallas in December of 2015 and January of 2016 in reference to the customer complaint, but Hallas failed to provide FINRA with any response to those requests. Subsequently, Hallas received a Suspension Notice Letter, informing him that he would be suspended for failing to cooperate with FINRA’s request. Hallas was suspended on April 18, 2016.
The Decision additionally stated that from March to June of 2016, incomplete responses were provided by Hallas to FINRA. Following this point, in March of 2017, FINRA sought Hallas’ testimony in regard to allegations of sales practice violations as well as the allegations of misconduct referenced within the customer complaint. Hallas evidently declined to participate in the investigation, and failed to make an appearance by the March 30, 2017 deadline. The Decision stated that Hallas also failed to cooperate with an additional request made by FINRA to testify on April 11, 2017.
On June 16, 2017, FINRA lodged a Complaint against Hallas, alleging that he failed to comply with FINRA personnel’s testimony requests. Hallas never responded or answered the Complaint, resulting in the Office of Hearing Officers’ Default Decision finding Hallas’ conduct violative of FINRA Rules 2010 and 8210.
Hallas is also subject of a final judgment by default obtained by the Securities and Exchange Commission (SEC) containing findings that Hallas recklessly or knowingly traded investments in five customer accounts, where he stole at least $170,000.00 from customers. Securities and Exchange Commission v. Demitrios Hallas, No. 17-cv-02999 (S.D.N.Y. Sept. 27, 2017). Evidently, trades that were not suitable for customers had been repeatedly executed by Hallas in their accounts. Particularly, one-hundred and seventy-nine daily leveraged exchange traded notes and exchange traded fund transactions were effected in customer accounts, allowing Hallas to accumulate fees and commissions totaling $128,000.00 while customers sustained an estimated $150,000.00 in losses.
Further, Hallas reportedly misappropriated at least $170,000.00 from one of his customers.
Evidently, Hallas was enriched financially by failing to consider his customers’ investment objectives, trading speculative investments that were not suitable. Hallas was enjoined permanently from committing violations of Securities Exchange Act of 1934 Section 10(b), SEC Rule 10b-5, as well as Securities Act of 1933 Section 17(a), and ordered to pay $549,987.64 in civil penalties, disgorgement, and prejudgment interest.
Hallas’ employment with Santander Securities LLC was terminated as of June 3, 2014. He later became employed with Forefront Capital Markets LLC between October 1, 2014 and July 28, 2015, and then PHX Financial, Inc. between August 3, 2015 and December 3, 2015.
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