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FINRA Broker Allegations

Allegations against: Larry Steven Werbel

Allegation type: Regulatory

Allegation status: Final

The allegations read: Without admitting or denying the findings, werbel consented to the sanctions and to the entry of findings that he solicited customers to invest in a low-priced security, which werbel himself had previously purchased. Werbel learned of the stock from a third-party stock promoter. The findings stated that werbel's member firm prohibited the solicitation of low-priced securities. Despite soliciting the customers' purchases of the security, werbel improperly coded the transactions as unsolicited and consequently caused the firm's books and records to be inaccurate in violation of rules 17a-3 and 17a-4 of the securities exchange act of 1934. After the customers purchased the security in their firm accounts, werbel disclosed their non-public personal information regarding their corresponding securities transactions to the non-affiliated third-party stock promoter for the purpose of determining whether these customers were eligible to receive additional shares of stock. As a result of the information werbel provided to the third-party stock promoter concerning the customers' transactions, at least five customers received additional shares through the mail. Werbel also received additional shares in connection with his personal transactions in the security. The findings also stated that the shares were not obtained through transactions at the firm, and the transactions were not recorded on the firm's books and records. Werbel did not give any prior notification, written or otherwise, to the firm regarding the transactions away from the firm through the third-party stock promoter and he did not receive any approval from the firm to engage in the transactions away from the firm. In addition to his transactions in the low-priced security, werbel purchased shares of another company from the third-party stock promoter. Werbel sent a wire from his firm account to the third-party stock promoter and purchased shares directly from the stock promoter. Werbel's transaction in the stock was not recorded on the firm's books and records. Werbel gave no prior written notice regarding his purchase of the stock and did not receive approval from the firm to engage in the transaction.

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