Florida Registered Representative Barred from Association with FINRA Member Firms to Resolve Allegations of Accepting Loans from Customer and Engaging in Private Securities TransactionsFriday, December 21, 2018
On November 29, 2018, former registered representative Ralph Von Lutzow submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) Department of Enforcement agreeing to a bar from associating with any member firms for allegedly accepting loans from customers. Von Lutzow was most recently associated with Oberweis Securities, Inc. in Sarasota, Florida from May 2003 to December 2016.
According to the AWC, Von Lutzow accepted six loans totaling $32,000 from an 81-year old investor and Oberweis customer without obtaining written pre-approval from the firm from October 2012 through January 2014. Though the firm did not have written procedures allowing registered representatives to borrow or lend money with customers, Von Lutzow specified on Oberweis’ internal compliance questionnaires that he acknowledged that “money and/or securities are never to be borrowed from a customer in any manner.” Based on the foregoing, Von Lutzow violated FINRA Rules 3240 and 2010.
The AWC also alleges that from July 2013 through April 2014, Von Lutzow also participated in private securities transactions in a pharmaceutical start-up company called Reven Pharmaceuticals for compensation with this same customer. Though Oberweis did not offer Reven shares, Von Lutzow allegedly facilitated the customer’s investments in Reven by faxing Share Purchase Agreements and Convertible Debenture Term Sheets for the customer to Reven and received selling compensation in the form of 1,155,000 shares of Reven stock and $12,500 in cash. Thus, FINRA asserts that Von Lutzow violated NASD Rule 3040 and FINRA Rule 2010.
Finally, FINRA alleges in the AWC that Von Lutzow provided false and misleading information to FINRA in response to requests for documents and information, in violation of FINRA Rules 8210 and 2010.
By signing the AWC, Ralph Von Lutzow consented, without admitting or denying allegations made against him, to a bar from associating with all FINRA member firms in any capacity. FINRA Department of Enforcement approved the AWC on December 3, 2018.
Oftentimes brokerage firms can be held liable for the brokers’ misconduct if they failed to supervise them while registered at the firm. If you invested through Ralph Von Lutzow and you suspect wrongdoing, you may be able to recover from him or with Oberweis Securities, Inc., the brokerage firm where he was registered. Since 1998, the experienced attorneys at ChapmanAlbin LLC have been fighting for victims of investment fraud and broker misconduct. Call us today at 1-877-410-8172 for a free consultation.