This post picks up our prior article concerning our investigation of claims concerning churning and failure to supervise after The Financial Industry Regulatory Authority (FINRA) made allegations stating that from September 2008, through May 2013, Newport Coast Securities, Inc. (Newport Coast) and five of its registered representatives excessively traded and churned 24 customers’ accounts. The five brokers named in the complaint are Douglas Leone (Leone), Andre LaBarbera (LaBarbera), David Levy (Levy), Antonio Costanzo (Costanzo), and Donald Bartelt (Bartelt). In addition, FINRA alleged that the representatives’ supervisors, including Marc Arena (Arena) and Roman Tyler Luckey (Luckey) and the firm’s Compliance Department managers knew took no meaningful steps to curtail the misconduct.
Newport Coast was formerly known as Grant Bettingen, Inc., and has been a FINRA member since 1986. Newport Coast is a wholly owned subsidiary of Rubicon Financial, Inc. (Rubicon), and until March 2013, was based in Irvine, California. The firm is currently based in New York and has approximately 45 branch offices and 122 registered representatives.
Douglas A. Leone entered the securities industry in 1993. He associated with a dozen different firms before joining Newport Coast in October 2008. From October 2008 through March 2013, Leone was associated with Newport Coast. Leone worked from his home office but was part of a Long Island, New York branch of Newport Coast. Leone is currently associated with Salomon Whitney LLC.
Marc A. Arena entered the securities industry in 1996. From October 2008, to March 2013, Arena was associated with Newport Coast as a broker and a securities principal. From March 2009, until he terminated his association with the firm, Arena was the Branch Office Manager of a Long Island office. Arena is currently associated with National Securities Corporation.
Andre V. LaBarbera entered the securities industry in 1990 where he associated with Stratton Oakmont, Inc. made famous in the movie “Wolf of Wall Street.” LaBarbera was associated with Newport Coast from July 2008 through July 2012. While associated with the firm, LaBarbera worked from his home in Dix Hills, New York. Thereafter, LaBarbera became associated with IFS Securities and currently with Titus Rockefeller, LLC.
David M. Levy entered the securities industry in 1992 where he associated with Stratton Oakmont. Levy was associated with Newport Coast from July 2008 through July 2012 as a broker and a securities principal. Levy worked from a branch office in West Palm Beach, Florida. Thereafter, Levy became associated with IFS Securities and currently with Titus Rockefeller, LLC.
Antonio Costanzo entered the securities industry in 1995 where he associated with Monroe Parker Securities. Costanzo was associated with Newport Coast from July 2008, through July 2012. While associated with the firm, Costanzo worked from his home in Chesapeake, Virginia. Thereafter, Costanzo became associated with IFS Securities and currently with Titus Rockefeller, LLC.
Roman Tyler Luckey entered the securities industry in 1997, when he associated with Brookstreet Securities Corp. Luckey was associated with Newport Coast from July 2008, through October 2012, and registered as a broker and as a securities principal.
Donald A. Bartelt entered the securities industry in 1985. From May 2010 to the present, Bartelt has been associated with Newport Coast as both a broker and a securities principal. Bartelt works from his home in Cave Creek, Arizona.
FINRA’s complaint alleged numerous causes of action against the brokers and supervisors including: (i) Newport Coast and former representatives Leone, LaBarbera, Levy, Costanzo, and Bartelt excessively traded and churned customer accounts; (ii) Newport Coast, LaBarbera, Levy, and Costanzo made unsuitable recommendations leveraged ETFs to customers who were elderly and/or retired, and who had limited investment experience, risk tolerance, income, and net worth; (iii) LaBarbera with causing inaccuracies in his firm’s books and records by mischaracterizing solicited trades as “unsolicited”; (iv) Leone with conveying false and exaggerated account balances to a customer; (v) Newport Coast, Arena, and Luckey with failing to supervise Leone, LaBarbera, Levy, Costanzo and Bartelt; (vi) Arena with failing to disclose liens and failing to update his Form U4; (viii) Costanzo and Levy with obstruction of FINRA’s disciplinary process by conditioning assistance and restitution on customers’ refusal to cooperate with FINRA; and (ix) Newport Coast with failing to establish an adequate system and procedures to supervise its sales of structured products
The attorneys at Gana LLP are experienced in representing investors in cases concerning churning and excessive trading. Our consultations are free of charge and the firm is only compensated if you recover.