Dow
NEWARK, N.J. (Legal Newsline) - New Jersey Attorney General Paula Dow announced on Wednesday that she has assessed a $75,000 civil penalty against a broker-dealer that allegedly failed to reasonably supervise its agents and keep accurate records.
The assessment was made through the New Jersey Bureau of Securities against The Investment Center, Inc., related to its alleged failure to supervise Dominic Vricella, the former manager of its Marlton branch office, and Anthony Faiola, an agent in that office.
Both men were undisclosed principals of North Shore Investment Group LLC, which was responsible for a combined $1.6 million in losses for 10 investors, including five clients of the Marlton branch office of Investment Center, Dow says.
The Bureau of Securities alleged that in the period between 2002-2004, The Investment Center conducted audits of the Marlton branch at least three times, uncovering deficiencies and violations of its own supervisory rules and procedures. Among the violations alleged were unapproved sales materials and business cards with unapproved email addresses.
Under state law, a broker-dealer must reasonably supervise its agents to make sure they are compliant with its own rules and procedures. Once these deficiencies were discovered, the Bureau alleged, it should have raised red flags and prompted a more thorough audit and examination.
"If investors had known that Vricella and Faiola stood to personally profit by steering their hard-earned money to an investment company they secretly controlled, they may have reconsidered," Dow said.
"But investors were never given this opportunity because The Investment Center Inc. failed to properly supervise its employees in the Marlton branch office."
The Bureau of Securities previously took disciplinary actions against both men. Vricella's agent registration was revoked and he was assessed a $100,000 civil penalty, with $85,000 of the total suspended.
Faiola was barred from the state's securities industry and assessed a $150,000 civil penalty, with $120,000 of his total suspended. Furthermore, in a separate case, Faiola pleaded guilty to committing securities fraud and paid $125,000 in restitution in a civil lawsuit.
The Investment Center entered into a consent order to settle this case and cooperated fully with Bureau investigators and has updated its policies and procedures to comply with requirements under New Jersey's Uniform Securities Law and related regulations, Dow said.