The allegations read: Cantone was named a respondent in a finra complaint alleging that he made numerous fraudulent and negligent misrepresentations and omissions of material fact in connection with two municipal bond offerings that defaulted, causing customers to lose more than $6,225,000. The complaint alleges that cantone willfully violated municipal securities rulemaking board (msrb) rule g-19 by failing to conduct due diligence sufficient for him to attain a reasonable basis to believe in the accuracy and completeness of key representations in the final official statement for the first bond offering, therefore lacking a reasonable basis to believe that the bond was suitable for any investor. The complaint also alleges that cantone willfully violated msrb rule g-17 and violated sections 17(a)(1), 17(a)(2), and 17(a)(3) of the securities act. In connection with the offer and sale of the first bond offering, and by the means and instrumentalities of interstate commerce, cantone obtained money and property by means of making false and misleading statements of material facts and omitting to state material facts necessary in order to make statements made, in light of the circumstances under which they were made, not misleading, and engaged in transactions, practices, and a course of business that operated as a fraud or deceit on the customers who purchased the bonds in the primary and secondary market. By reason of this misconduct, cantone engaged in deceptive, dishonest, or unfair practices and failed to deal fairly with all persons. In connection with the offer and sale of the second municipal bond offering, and by the means and instrumentalities of interstate commerce, cantone employed a device, scheme, or artifice to defraud investors. Cantone, acting with scienter, knew that the alleged misrepresentations and omissions of material fact made to customers in connection with the offering and sale of the bonds were false and misleading, or, at a minimum, was reckless in selling the bonds based upon the alleged false and misleading communications. In the alternative, cantone made numerous negligent misrepresentations and omissions of material fact in connection with the second municipal bond offering, willfully violating msrb rule g-17 and violating sections 17(a)(2) and 17(a)(3) of the securities act. The complaint further alleges that cantone willfully violated msrb rules g-17 and g-47. Prior to selling the first bond to his customers in the primary offering and in secondary market transactions, cantone failed to disclose to customers material information about the transaction known by him, as well as material information about the security that was reasonably accessible to the market, which was omitted from the bond's official statement. In connection with the second municipal bond offering, prior to selling it in the primary offering and in secondary market transactions, cantone failed to disclose to customers the falsity of the misrepresentations contained in or the material information omitted from the official statement, all of which was material information.
