[ by Melanie Gretchen ] A Registered Rep with VFinance Investments, based in Coral Gables, FL, was charged by FINRA with sending documents and account statements to customers that contained false and inflated account values. RR Ricardo Blanco... got his Series 7 License since 1988 and his Series 63 since 1989.  From 1987 to present, Blanco was associated with several different FINRA members - although he currently is not associated with any firm.  He worked for vFinance Investments from April 2006 through June 2010, when most of the reported incidents took place.  He joined Aurora Capital in June 2010 but left or was terminated one month later.  Thereafter, he had a 15-month outing with MidSouth Capital before departing on 10/20/11. FINRA Findings and Allegations. Between 12/4/08 and 7/12/10, Blanco sent 11 documents that contain false and inflated account values to one customer.  In 2010, he sent a false account statement to this same customer, indicating a $3 million account value - when, in fact, it was less than a dollar.

[C-I Note: This case is bewildering, leaving us with more questions than answers - partly because FINRA provides very little detail in the Monthly Disciplinary Report and the AWC Letter.  Some of the questions that come to mind:

• Was the customer not receiving statements from VFinance and Aurora Capital while also receiving bogus valuations from Blanco?
• How is it possible to report $3 million valuation when the account is essentially flat?
• And, if the customer did have millions in assets at some point in time, what happened to the money - Did Blanco misappropriate it and spend it on himself?  Did he churn the account to its current $1 valuation?
• What issues or red flags, if any, did firm supervisors detect?

The following year, on 5/20/11, Blanco sent a false account statement to a 2nd customer - it indicated an account value of $2 million, when the account already had been closed. Same questions apply to account #2. FINRA Attempts to Investigate. In 2011, FINRA opened an investigation into Blanco's activities. Blanco did not cooperate with FINRA's requests for documents and information.  By 10/20/11, Blanco advised FINRA that he was not going to provide the requested documents - a violation of FINRA Rules 8210 and 2010.

[C-I Notes: It's understandable that FINRA would want Blanco to provide documents (that were obviously sent outside of the firm) and to provide explanations - for example, are there other customers who were affected by his inflated valuations?  Yet, Blanco's documents weren't really needed to gain insight into the case - or more importantly, to determine whether customers lost $3mn and $2mn, respectively. Yet, here are alternative sources of documentation that FINRA could have gotten - and we presume they did:

• VFinance customer statements for the 2 customers throughout Blanco's time with the firm  [to determine what cash and securities the customers had at varying points in time]
• Copies of correspondence from customers who were sent these inflated documents and statements  [to see the extent of his communications and to understand if these customers are for real - for example, did the secondnd customer really believe he had $2 million in his account, that had been closed?]
• If the customers did have sizable account holdings that somehow dissipated, was there an issue with the VFinance supervisors?
• Or, was Ricardo Blanco just plain crazy and the customers merely put up with his antics?]

FINRA Sanctions. For allegedly violating NASD Conduct Rule 2110 and FINRA Rule 2010, Blanco was barred from the industry. For (very little) additional information, go to  [FINRA AWC #2011027098601] and  [FINRA Disciplinary Actions for January 2012].