FINRA

WILLFULLY VIOLATED SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934, RULE 10B-5 THEREUNDER; VIOLATED FINRA RULES 2010, 2020, 2150(A), 8210 - RANDY SCHNEIDER RECEIVED CHECKS TOTALING APPROXIMATELY $39,000 FROM AN ELDERLY CUSTOMER TO BE DEPOSITED INTO A BROKERAGE ACCOUNT AT SCHNEIDER'S MEMBER FIRM TO BE USED TO PURCHASE BONDS AT A LATER DATE. INSTEAD OF DEPOSITING THE CHECKS INTO THE BROKERAGE ACCOUNT, SCHNEIDER MISAPPROPRIATED THE CHECKS, CASHED THEM OR DEPOSITED THEM INTO HIS OWN BANK ACCOUNT AND CONVERTED THE FUNDS TO HIS OWN USE. SCHNEIDER DID NOT DISCLOSE TO THE CUSTOMER THAT HE MISAPPROPRIATED THE CHECKS AND INSTEAD OF PURCHASING BONDS, CONVERTED THE FUNDS TO HIS OWN USE, WITHOUT THE CUSTOMER'S AUTHORIZATION. SCHNEIDER DEPOSITED BEARER BONDS OWNED BY THE CUSTOMER INTO HIS OWN BROKERAGE ACCOUNT, SOLD THE BONDS AND CONVERTED THE PROCEEDS, A TOTAL OF AT LEAST $223,000 TO HIS PERSONAL USE. AS PART OF THE CONVERSION, HE WIRED AT LEAST $200,000 TO HIS PERSONAL BANK ACCOUNT, WITHOUT DISCLOSING HIS ACTIONS TO THE CUSTOMER AND WITHOUT THE CUSTOMER'S AUTHORIZATION. ANOTHER ELDERLY CUSTOMER DELIVERED BEARER BONDS WITH AN APPROXIMATE MARKET VALUE OF $20,000 TO SCHNEIDER TO DEPOSIT INTO HIS BROKERAGE ACCOUNT. SCHNEIDER PROVIDED THE CUSTOMER WITH A RECEIPT EVIDENCING HIS ACCEPTANCE OF THE BONDS BUT INSTEAD OF MAINTAINING THE BONDS, HE SOLD THEM AND CONVERTED THE PROCEEDS TO HIS PERSONAL USE, WITHOUT DISCLOSING HIS MISAPPROPRIATION AND CONVERSION TO THE CUSTOMER AND WITHOUT THE CUSTOMER'S AUTHORIZATION. SCHNEIDER FAILED TO RESPOND TO FINRA REQUESTS TO APPEAR FOR ON-THE-RECORD TESTIMONY AND TO PRODUCE DOCUMENTS AND INFORMATION.

Decision

Bar (Permanent)

All Capacities

Indefinite

4/12/2013

Restitution

$282,000.00

THE FIRST CAUSE IN THE COMPLAINT ALLEGED VIOLATIONS OF SECTION 10(B) OF THE SECURITIES ACT OF 1934, EXCHANGE RULE 10B-5 AND FINRA RULE 2020. IN LIGHT OF THE HEARING OFFICER'S CONCLUSION THAT SCHNEIDER MISAPPROPRIATED CUSTOMER FUNDS IN VIOLATION OF RULE 2150(A), THE HEARING OFFICER DECLINED TO ADDRESS THE ADDITIONAL FRAUD THEORIES, WHICH MARKET REGULATION DID NOT SET FORTH IN A SEPARATE CAUSE OF ACTION. DEFAULT DECISION RENDERED DECEMBER 11, 2012 WHEREIN SCHNEIDER IS BARRED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR MISAPPROPRIATING CUSTOMER FUNDS IN VIOLATION OF FINRA RULES 2010 AND 2150; AND FAILING TO APPEAR AND PROVIDE TESTIMONY, DOCUMENTS AND INFORMATION IN VIOLATION OF FINRA RULES 2010, 8210. SCHNEIDER IS ALSO ORDERED TO PAY $282,000, PLUS INTEREST, IN RESTITUTION TO CUSTOMERS. APPEALED TO THE NAC ON JANUARY 8, 2013. SCHNEIDER FAILED TO FILE A REQUIRED STATEMENT EXPLAINING WHY HIS APPEAL SHOULD NOT BE DISMISSED AS ABANDONED. PURSUANT TO FINRA RULE 9344(B), THE NAC DISMISSED THE APPEAL AS ABANDONED, AND THE DECEMBER 11, 2012 DEFAULT DECISION SHALL CONSTITUTE THE FINAL DISCIPLINARY ACTION BY FINRA. THE DECISION IS FINAL APRIL 12, 2013.

NEW JERSEY BUREAU OF SECURITIES

SCHNEIDER USED THE MONIES FROM CLIENTS CHECKS, BEARER BONDS AND BEARER BOND COUPONS FOR HIS OWN PERSONAL BENEFIT, INCLUDING, BUT NOT LIMITED TO, SHOPPING, INSURANCE PAYMENTS, UTILITY BILLS, DOCTOR'S BILLS, GAS, AN EXTERMINATING SERVICE AND CAR WASHES. IN THE AGGREGATE, SCHNEIDER TOOK A TOTAL OF APPROXIMATELY 123 BEARER BONDS AND ASSOCIATED BEARER BOND COUPONS FROM NEW JERSEY CLIENTS, REDEEMING THEM FOR APPROXIMATELY $615,000 FOR HIS PERSONAL BENEFIT. HE ALSO TOOK NINE CHECKS WORTH APPROXIMATELY $41,000, USING THOSE MONIES FOR HIS PERSONAL BENEFIT AS WELL. FINALLY, SCHNEIDER TOOK FOUR BEARER BONDS WORTH $20,000 WHICH HE WAS UNABLE TO REDEEM.

Order

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

$250,000.00

Revocation

SCHNEIDER'S AGENT AND INVESTMENT ADVISER REPRESENTATIVE REGISTRATIONS ARE REVOKED PURSUANT TO N.J.S.A. 49:3-58; SCHNEIDER IS DENIED ALL EXEMPTIONS CONTAINED IN N.J.S.A. 49:3-50 SUBSECTION (A) PARAGRAPHS 9, 10 AND 11 AND SUBSECTION (B); AND (E) THE EXEMPTIONS TO THE REGISTRATION REQUIREMENTS PROVIDED BY N.J.S.A. 49:3-56(B), N.J.S.A. 49:3-56(C) AND N.J.S.A. 49:3-56(G) ARE HEREBY REVOKED AS TO SCHNEIDER.