Former Miami Broker Barred by FINRAWednesday, February 26, 2020
On December 18, 2019, the Financial Industry Regulatory Authority (FINRA) Office of Hearing Officers released a Hearing Panel Decision granting the motion for summary disposition that Robert Juan Escobio failed to comply with five regulatory requests for documents and information and five requests for on-the-record testimony pursuant to FINRA Rule 8210. Though Robert Escobio is not currently associated with a FINRA member firm, he was associated with Southern Trust Securities, Inc. in Miami, Florida from June 2000 to July 2017.
In August 2016, a federal court entered a judgment against Escobio, deeming him statutorily disqualified, after the Commodities Futures Trading Commission (CTFC) brought an action against him for allegedly engaging in a fraudulent commodities scheme. In July 2017, following this judgment, the National Adjudicatory Council (NAC) denied a Membership Continuance Application filed by his member firm, Southern Trust Securities, to allow him to continue associating with the firm. Shortly thereafter, the firm filed a Form U5 notifying FINRA of Escobio’s voluntary termination with the firm.
During a routine examination with Southern Trust Securities in 2018, FINRA Department of Enforcement became alerted to the potential that Escobio was still acting as a registered representative with the firm even though he was statutorily disqualified. On March 26, 2019, FINRA staff sent the first regulatory request to Escobio’s residential address. Since Escobio was incarcerated for contempt of court around this time, FINRA staff sent another request for information and documents and additional requests after the first two went unanswered.
Though Escobio is not disputing that he did not comply with the ten regulatory requests, he asserts that FINRA Department of Enforcement’s investigation was illegitimate. Escobio claims that the investigation was conducted solely to obtain documents for the Commodities Futures Trading Commission (CTFC) to collect on its judgment against Escobio. He also claims that the Complaint was filed over two years after his retirement, thus FINRA does not have jurisdiction over this proceeding.
Escobio made numerous other assertions in an attempt to invalidate FINRA’s complaint. However, the Hearing Panel found that Escobio’s arguments are erroneous and that he failed to point to any specific facts to support his assertions. The Hearing Panel states in the Decision that the Department of Enforcement has pointed to documents that negate any inference that their investigation was discriminatory or brought forth against Escobio improperly. The Hearing Panel also asserts that unlike what Escobio stated in his rebuttal, FINRA’s jurisdiction is based upon when Escobio’s registration was terminated, not when his employment with the firm was terminated. Thus, FINRA Department of Enforcement did, in fact, have jurisdiction over Escobio for the investigation.
Thus, the Hearing Panel granted FINRA Department of Enforcement’s motion to impose a bar as a sanction for violating FINRA Rules 8210 and 2010. The Hearing Panel concluded that FINRA Department of Enforcement demonstrated numerous efforts to obtain information and testimony from Escobio regarding his association with Southern Trust Securities after he was statutorily disqualified and provided him with several opportunities to appear for on-the-record testimony. These regulatory violations are undisputed by both parties.
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