Richard Goble - the founder, sole owner and director of North American Clearing, Inc., and a former FINRA board member - was found liable for committing fraud and aiding and abetting his firm’s violations of the Securities Exchange Act of 1934.  The firm had cleared for 40 correspondent firms and more than 10,000 customer accounts.  Following a 5-day bench trial, the judge found “it clear from the evidence of record, that North American had financial problems and Defendant Goble and North American’s executives made a substantial effort to conceal it.”  

Specifically, the judge found that Richard Goble had acted with the “highest degree of scienter” in directing North American to falsely record a $5 million money market purchase, which artificially lowered the firm’s reserve requirement under the Customer Protection Rule and allowed North American to improperly withdraw more than $3 million from its Exclusive Benefit of Customers (EBOC) Account.  The Court further found this “sham” transaction constituted fraud on the market.

This action was commenced by the SEC 5/27/08, against North American Clearing, Goble, its president Bruce Blatman and its former FinOp Principal Timothy Ward.  The other defendants previously settled the Commission’s charges against them by consenting, without admitting or denying the Commission’s allegations, to permanent injunctions. Pursuant to his settlement, the Court previously ordered Blatman to pay a civil penalty.  A civil penalty amount against Ward is still to be decided.   [SEC Litigation Release 21960, 5/5/11].

SEC v. North American Clearing, Inc., et al., Civil Action No. 06-08-cv-829-Orl-35KRS (M.D. Fla.)