[ by Howard Haykin ]

FINRA filed on Wednesday for a Temporary Cease-and-Desist Order (TCDO) against Herkimer, NY-based Westor Capital Group, Inc. and Richard Hans Bach - Westor's President, CCO, and FinOp - to immediately stop further misappropriating and misusing of customer funds and securities.  

Westor's primary business is trading in microcap securities through its own accounts held at several different brokerage firms and has ineffective measures to track and reconcile its customers' stock positions. This makes it possible for Westor and Bach to conceal the improper use of securities, the complaint alleges.

FINRA also issued a complaint, charging both with failing to allow customers to:  (i) withdraw account balances and deliver securities;  (ii) misusing customer securities;  (iii) failing to maintain physical possession or control of securities.  Both also were charged with operating an unapproved self-clearing business.

Examples of Misappropriation and Misuse.  

• A customer sought to withdraw $97K from his account, but Westor refused. 
• Westor, acting through Bach, misused 65,000 shares of customers' fully paid common stock to effect and cover short sales by another customer, without authority to do so.
• By improperly using the customer's shares, Westor and Bach violated their obligation to maintain physical possession or control of securities.

Westor and Bach may file a response and request a hearing before a FINRA disciplinary panel.  Possible sanctions include a fine, an order to pay restitution, censure, suspension or bar from the securities industry.

For further details, go to:   [FINRA News Release, 1/23/13] and ...

[Westor Capital Group, Inc. and Richard Hans Bach Notice Seeking Temporary Cease-and-Desist Order]

[Westor Capital Group, Inc. and Richard Hans Bach Complaint].