FINRA

BARTELT WAS NAMED A RESPONDENT IN A FINRA COMPLAINT ALLEGING THAT HE, WITH HIS MEMBER FIRM AND OTHER FIRM REPRESENTATIVES, EXCESSIVELY TRADED AND CHURNED CUSTOMERS' ACCOUNTS. THE COMPLAINT ALLEGES THAT THE MISCONDUCT SHOULD HAVE QUICKLY DRAWN SCRUTINY, AND BEEN STOPPED, BECAUSE COST-TO-EQUITY RATIOS WERE OFTEN OVER 100 PERCENT; TURNOVER RATES WERE OFTEN OVER 100; THERE WERE EXTRAORDINARY AMOUNTS OF IN-AND-OUT TRADING; CUSTOMER ACCOUNTS WERE HIGHLY MARGINED AND OFTEN CONCENTRATED IN ONE SECURITY; THERE WERE LARGE NUMBERS OF TRANSACTIONS IN WHICH THE TOTAL COMMISSION/MARKUP PER TRADE EXCEEDED THREE PERCENT AND, IN MANY INSTANCES, EXCEEDED FOUR PERCENT; THERE WAS A DECEPTIVE MIX OF RISKLESS PRINCIPAL AND AGENCY TRADING IN NUMEROUS ACCOUNTS, NAMELY, HIGHER COST TRADES IN WHICH MARKUPS ALMOST ALWAYS EXCEEDED THREE PERCENT (AND GENERALLY EXCEEDED $1,000 PER TRADE) WERE EXECUTED ON A RISKLESS PRINCIPAL BASIS WHEREAS LOWER COST TRADES, TYPICALLY INVOLVING SALES OF THE SAME SECURITIES, WERE EXECUTED ON AN AGENCY BASIS; INVERSE AND/OR LEVERAGED EXCHANGE TRADED FUNDS (ETFS) AND EXCHANGE TRADED NOTES (ETNS) REMAINED IN ACCOUNTS FOR MULTIPLE TRADING SESSIONS; SOLICITED TRADES WERE INACCURATELY CHARACTERIZED AS UNSOLICITED; AND NEARLY ALL OF THE CUSTOMER ACCOUNTS AT ISSUE EXHIBITED LARGE LOSSES. THE TRADING WAS EXCESSIVE IN LIGHT OF, AND INCONSISTENT WITH, THE CUSTOMERS' INVESTMENT OBJECTIVES AND FINANCIAL SITUATION. BARTELT, THE FIRM AND THE OTHER REPRESENTATIVES ENGAGED IN A MANIPULATIVE, DECEPTIVE AND FRAUDULENT SCHEME BY CHURNING THE ACCOUNTS OF CUSTOMERS. THEY ACTED WITH INTENT TO DEFRAUD AND/OR WITH RECKLESS DISREGARD OF THEIR CUSTOMERS' INTERESTS BY SEEKING TO MAXIMIZE THEIR OWN REMUNERATION IN DISREGARD OF THE INTERESTS OF THEIR CUSTOMERS AND AS A RESULT, WILLFULLY VIOLATED SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 THEREUNDER, FINRA RULES 2010 AND 2020, AND NASD RULES 2110 AND 2120.

Decision

Bar (Permanent)

All Capacities

Indefinite

11/14/2016

Civil and Administrative Penalty(ies)/Fine(s)

$250,000.00

Restitution

$200,330.66

Default decision rendered October 17, 2016. The sanctions were based on findings that Bartelt recommended quantitatively unsuitable trading in the accounts of customers. The findings stated that the trading activity in all of the customer accounts at issue was excessive and inconsistent with the customers' financial circumstances and investment objectives. The findings also stated that in all of the customer accounts at issue, the benefits to Bartelt far outstripped any likely return to the customers from the trading, making it manifest that he was trading for his own benefit without regard to the interests of the customers. Accordingly, Bartelt acted in willful and reckless disregard of the customers' interests and therefore churned customer accounts in violation of Section 10(b) and Rule 10b-5 of the Securities and Exchange Act of 1934 and FINRA Rule 2020. The decision became final November 14, 2016. Bartelt is fined $250,000, less any amounts that he can demonstrate he has paid in restitution.