← Broker database 2023-05-05
Stefan Andrew Spath Suspended 20 Months for Misrepresentations and Undisclosed Outside Business Activity
According to FINRA, Stefan Andrew Spath was assessed a deferred fine of $15,000 and suspended from association with any FINRA member in all capacities for 20 months for multiple serious violations.
Spath intentionally made material misrepresentations and omitted material information in communications with issuers about Form 211 applications required to initiate or resume quotations. In these emails, Spath typically misrepresented or gave the misleading impression that he had filed a Form 211 with FINRA or responded to FINRA information requests when he had not done so. This information was material to issuers because the Form 211 process determined whether his firm could initiate quotations for their securities and whether they could apply for admission to over-the-counter markets.
Spath also provided false and misleading responses to FINRA requests for information supporting certain Forms 211. His responses were false regarding how and when the firm first became aware of issuers and whether all relevant emails were attached to responses.
Additionally, Spath engaged in an undisclosed outside business activity by assisting a friend with securing short-term loans from investors to finance a cattle and olive farm. Spath introduced five investors (none of whom were firm customers) to the farm owner, and loan agreements totaling $450,000 were executed. As compensation for these referrals, Spath received approximately $74,000. He did not provide prior written notice to the firm about his involvement with the farm or that he received compensation for referrals.
Spath also submitted two compliance questionnaires to the firm in which he falsely attested he had not participated in undisclosed outside business activities. This case demonstrates serious misconduct involving misrepresentations to both issuers and regulators, coupled with undisclosed outside activities and false attestations. The 20-month suspension reflects the severity and repeated nature of the violations.