Subscribe to our mailing list

* indicates required







We seek to provide information, insights and direction that may enable the Financial Community to effectively and efficiently operate in a regulatory risk-free environment by curating content from all over the web.


Stay Informed with the latest fanancialish news.




Regulatory Sanctions

A Present-Day ‘Rip Van Winkle’ Comes Full Circle with FINRA

April 10, 2019

by Howard Haykin



"Rip Van Winkle," an 1818 short story by the American author Washington Irving, follows a Dutch-American villager in colonial America named Rip Van Winkle who falls asleep in New York’s Catskill Mountains and wakes up 20 years later, having missed the American Revolution.
The present-day ‘Rip Van Winkle’ - a broker from Pelham, New York (not far from the Catskills) - worked for Salomon BrothersJamie Securities and Yamaichi International from 1981 through 1988, at which point he seemingly fell asleep. In 2014, ‘Rip’ woke up from his sleep and joined Kestra Investment Services.
However, present-day ‘Rip Van Winkle’ (“RIP”) didn’t hang around for very long. He was discharged by the broker-dealer in 2016, and was barred by FINRA in 2018.
So much for fairy tale endings.



WHAT WENT WRONG.    From November 2015 to December 2016), RIP engaged in outside business activities and a private securities transaction, without first providing prior written notice to Kestra Investment Services.


The undisclosed outside business activities (“OBAs”) involved … a proposed $100 million investment fund that would be offered to individual and institutional investors.

  • RIP registered “Origin Fund LLC” as a limited liability corporation with the State of Connecticut, naming himself as the sole member and manager.
  • RIP opened a bank account and received a Tax ID Number for the fund.
  • RIP created an email address with the domain name “”
  • RIP prepared a business plan and a presentation describing his proprietary investment strategy, while naming himself 'Chief Investment Officer' and 'Manager'.
  • RIP met with and solicited individual and institutional investors.



The undisclosed private securities transaction (“PST”) involved … a $50,000 investment that RIP solicited and received from an individual as seed money for his efforts to launch the Origin Fund. In return, it was agreed that the investor would receive a 4% equity share of the Origin Fund and share yearly in any profits generated by the venture. The transaction was memorialized in a written letter of understanding.



By engaging in an undisclosed OBA and an undisclosed PST, RIP violated FINRA Rule 3720 and FINRA Rule 3280, respectively. RIP then violated FINRA Rule 8210, by providing false written responses and OTR testimony during FINRA's investigation.



This case was reported in FINRA Disciplinary Actions for February 2019.

For further details, go to ...  FINRA Disciplinary Actions Online, and refer to Case #2016051985601.