[ by Howard Haykin and Melanie Gretchen ]

FINRA charged the President/Owner of TWS Financial, LLC, a Brooklyn-based broker-dealer, with defrauding 3 customers of more than $4 million through a scheme FINRA says was conducted primarily outside the securities firm.  The complaint, filed Wednesday, alleges that the fraud involved converting client funds for the personal use of the broker-dealer's president, and covering it up by providing the customers with falsified account statements. 

Profile of Respondent. Roman Sledziejowski, a Polish-born investment manager, and his firm TWS Financial, catered to the Polish investment community in Brooklyn, and all of his victims were natives of Poland.   Sledziejowski first registered with FINRA as a Series 7 General Securities Rep in 1998.  From August  2006 through the present, he's maintained his Series 7 and Series 24 licenses through TWS.  On 11/9/12, TWS  filed a Form BDW terminating its securities license, which awaits approval. 

To date, TWS has not filed a Form U5 to terminate Sledziejowski's association with the firm.

FINRA Findings and Allegations. TWS Financial, catered to the Polish investment community in Brooklyn.  All of Sledziejowski's victims were natives of Poland.  From approximately June 2009 through August 2012, while associated with TWS Financial, Sledziejowski converted and/or misused funds from at least 3 customers.

In some cases, Sledziejowski had customers wire funds from their bank accounts or brokerage accounts to Innovest Holdings LLC, a company wholly owned and controlled by Sledziejowski, separate from the broker-dealer, which, in turn, owned TWS, for various purported investment purposes.  In other cases, he wired funds directly from the customers' TWS brokerage accounts to Innovest Holdings without their knowledge or consent.vvIn other instances, Sledziejowski wired funds directly from the customers' TWS brokerage accounts to Innovest Holdings without their knowledge or consent.

In addition, he provided false account statements to 2 of those customers in an attempt to conceal the misconduct.  When some of his customers asked him about their brokerage accounts' values or tried to withdraw from their accounts, Sledziejowski provided customers with falsified account statements or wired funds from Innovest's bank accounts back to their bank or brokerage accounts.  More than $3 million is still unaccounted for.

FINRA Sanctions. Going forward, TWS and Sledziejowski could be fined, ordered to pay restitution, censured, suspended or barred from the securities industry.  On 11/9/12, TWS Financial filed an application to withdraw its broker-dealer registration.  He willfully violated Section 10(b) of the Securities Exchange Act of 1934 and Rule I Ob-5 thereunder, and violated NASD Conduct Rule 2330(a) and FINRA Rules 2010, 2020, and 2150.  When FINRA staff attempted to question Sledziejowski on the record about these transactions, he refused to appear before the staff and provide the requested testimony, thus violating of FINRA Rules 8210 and 2010.

For further details, go to:   [FINRA News Release, 11/28/12] and [Roman Sledziejowski Action].