FINRA

FINRA RULES 2010, 8210, NASD RULES 1017(A), 2110: JARKAS CAUSED HIS MEMBER FIRM, ON SEVERAL OCCASIONS, TO UTILIZE THE INSTRUMENTALITIES OF INTERSTATE COMMERCE TO ENGAGE IN A SECURITIES BUSINESS WITHOUT MAINTAINING SUFFICIENT NET CAPITAL CAUSING THE FIRM TO VIOLATE SEC RULE 15C3-1. JARKAS CAUSED HIS FIRM TO TRADE SECURITIES FOR ITS OWN ACCOUNT, AND BY TRADING SECURITIES FOR ITS OWN ACCOUNT IT WAS SUBJECTED TO A HIGHER NET CAPITAL REQUIREMENT, THEREBY THE FIRM EFFECTED A MATERIAL CHANGE IN ITS BUSINESS OPERATIONS. JARKAS NEGLECTED TO CAUSE THE FIRM TO FILE AN APPLICATION WITH FINRA FOR APPROVAL OF A MATERIAL CHANGE IN ITS BUSINESS OPERATIONS. JARKAS FAILED TO APPEAR FOR FINRA ON-THE-RECORD INTERVIEW.

Decision

Bar (Permanent)

All Capacities

Indefinite

10/5/2015

Monetary Penalty other than Fines

$6,978.16

HEARING PANEL DECISION RENDERED FEBRUARY 7, 2014 WHEREIN RESPONDENT WAS FOUND TO HAVE ALLOWED A FIRM TO CONDUCT A SECURITIES BUSINESS WITH INSUFFICIENT NET CAPITAL, IN VIOLATION OF NASD RULE 2110 AND FINRA RULE 2010; FAILED TO FILE AN APPLICATION FOR APPROVAL OF A MATERIAL CHANGE IN BUSINESS OPERATIONS, IN VIOLATION OF NASD RULES 1017(A) AND 2110; AND FAILED TO APPEAR FOR TESTIMONY, IN VIOLATION OF FINRA RULES 8210 AND 2010. JARKAS IS BARRED FOR THE FAILURE TO APPEAR FOR TESTIMONY. JARKAS ALSO IS RESPONSIBLE FOR ONE HALF OF THE COST OF THE HEARING IN THE AMOUNT OF $5,436.14. IN LIGHT OF THE BAR, NO FURTHER SANCTIONS ARE IMPOSED FOR HIS OTHER VIOLATIONS. APPEALED TO THE NAC ON FEBRUARY 19, 2014. NAC decision rendered October 5, 2015 wherein the findings made are affirmed and the sanctions imposed by the Hearing Panel are modified by assessing an individual sanction for each violation. Jarkas is barred from associating with any FINRA member in any capacity and in light of imposing a bar, the NAC considers the additional sanctions assessed redundant and does not impose them. The bar is effective immediately upon the issuance of the decision. On November 10, 2015 Jarkas appealed the decision to the SEC. The bar remains in effect. SEC Decision rendered April 1, 2016, wherein the sanction against Jarkas was sustained. The sanction was based on the findings that Jarkas allowed his member firm to conduct a securities business without maintaining sufficient net capital on August 27 and 29, 2008, September 29 and 30, 2008, March 31, 2009, and April 27, 2009. The findings stated that Jarkas' own missteps primarily caused the net capital violations. Jarkas instructed an individual to trade securities in the firm's average price account that were not customer orders. Jarkas' firm maintained securities positions in the average price account for periods of up to seven business days before either allocating the positions to the customer's account, or, in some cases, liquidating the securities positions without a customer allocation. These trades were proprietary in that the firm-and not a customer-absorbed the market risk associated with the securities positions. The firm was engaging in proprietary trading, which impacted its net capital requirement. The firm failed to reflect the IRS payroll tax liability in its net capital computation and FOCUS filings for two quarters. Had the tax liability been reported, it would have shown that the firm was operating without sufficient net capital. The findings also stated that the SEC set aside the findings that Jarkas caused his firm to conduct a securities business without maintaining sufficient net capital on April 28, 2009. The findings also included that Jarkas failed to file a continuing membership application for approval of a material change in business operations. The firm was approved to engage in a number of business activities but proprietary trading was not one of them. The firm engaged in proprietary trading, which triggered a higher minimum net capital requirement of $100,000 and the corresponding filing requirement of an application under NASD Rule 1017(a), which Jarkas failed to file. FINRA found that Jarkas failed to appear for FINRA on-the-record testimony during its investigation. The decision became final May 31, 2016.

FINRA

JARKAS FAILED TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

LETTER

Suspension

ALL CAPACITIES

N/A

9/10/2009

PURSUANT TO ARTICLE VI, SECTION 3 OF FINRA BY-LAWS, AND FINRA RULE 9554, JARKAS'S FINRA REGISTRATION IS SUSPENDED SEPTEMBER 10, 2009 FOR FAILURE TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO FINRA REQUESTS TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

CLAIMANT ALLEGES EXCESSIVE ACTIVITY IN HIS ACCOUNTS AND DISSATISFIED WITH THE PERFORMANCE FOR SAME BETWEEN 2003 AND 2006.

$1,700,000.00

$1,700,000.00

The Award has not been paid.

RESPONDENT STRONGLY DENIES AND DISAGREES WITH AWARD, BELIEVES ALLEGATIONS ARE FALSE, AND DENIES ANY WRONGDOING. THE CLAIMS HAVE NO MERIT. PANEL FAILED TO PROVIDE ANY RATIONALE FOR THE AWARD GRANTED OR ANY EXPLANATION OR FINDINGS OF WRONGDOING AGAINST RESPONDENT

FINRA

NASD RULES 2110, 2310: JARKAS RECOMMENDED OR, IN THE EXERCISE OF DISCRETION, EXECUTED SECURITIES TRANSACTIONS IN A CUSTOMER'S ACCOUNT AT HIS MEMBER FIRM. JARKAS DID NOT HAVE A REASONABLE BASIS FOR BELIEVING THAT THE VOLUME OF TRADING HE RECOMMENDED WAS SUITABLE FOR THE CUSTOMER IN LIGHT OF INFORMATION KNOWN TO HIM ABOUT THE CUSTOMER'S FINANCIAL CIRCUMSTANCES AND NEEDS AND HIS OTHER SECURITY HOLDINGS AND INVESTMENT OBJECTIVES. THE TRADES WERE EXCESSIVE IN NUMBER AND RESULTED IN EXCESSIVE COSTS TO THE ACCOUNT AND THE TRADING WAS CONSISTENT ONLY WITH THE CUSTOMER'S LOWEST-PRIORITY OBJECTIVE, SHORT TERM TRADING.

Decision & Order of Offer of Settlement

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

$25,000.00

Suspension

ALL CAPACITIES

SIX MONTHS

2/1/2010

7/31/2010

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, JARKAS CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS, THEREFORE HE IS FINED $25,000 AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR SIX MONTHS. THE FINE IS DUE AND PAYABLE IMMEDIATELY UPON RE-ASSOCIATION WITH A MEMBER FIRM FOLLOWING THE SUSPENSION OR PRIOR TO ANY REQUEST FOR RELIEF FROM ANY STATUTORY DISQUALIFICATION RESULTING FROM THIS OR ANY OTHER EVENT OR PROCEEDING, WHICHEVER IS EARLIER. THE SUSPENSION IS IN EFFECT FROM FEBRUARY 1, 2010, THROUGH JULY 31, 2010.

FINRA HAS FALSELY ACCUSED GLOBAL CROWN CAPITAL AND MR. JARKAS OF VIOLATING NASD RULES 2110 AND 2310, KNOWING THAT THIS ISSUE WAS ADJUDICATED ONCE IN AN ARBITRATION FRIVOLOUSLY BROUGHT BY THE CUSTOMER TO RESTORE MARKET LOSSES HE INCURRED. THERE WERE NO FINDINGS OF ANY CULPABILITY IN THAT ARBITRATION. ONCE AGAIN, MR. JARKAS EMPHATICALLY DENIES THE AFOREMENTIONED ALLEGATIONS AS BASELESS AND CONTENDS THAT FINRA IS VIOLATING ITS OWN RULES BY ATTEMPTING TO RE-TRY A MATTER THAT HAS ALREADY BEEN ADJUDICATED. THIS IS A BLATANT ATTEMPT BY FINRA TO TRY TO UNRAVEL AND INFLUENCE MATTERS THAT HAVE ALREADY BEEN RESOLVED. GLOBAL CROWN CAPITAL AND MR. JARKAS ARE CONFIDENT THAT THEY WILL PREVAIL IN THIS MATTER.

UNSUITABILITY, CHURNING, BREACH OF FIDUCIARY DUTY, FRAUD.

$549,000.00

RESPONDENTS HAVE FILED AN APPEAL WITH A CALIF. SUPERIOR COURT IN SAN FRANCISCO TO VACATE THE AWARD ON THE GROUND THAT THE ARBITRATION PANEL REFUSED TO POSTPONE THE PROCEEDINGS PENDING A FINAL DECISION BY THE SEC IN AN ADMINISTRATIVE MATTER INVOLVING ONE OF THE INVESTMENTS AT ISSUE IN THIS MATTER. THE SEC DISMISSED THE PROCEEDINGS AGAINST THE RESPONDENTS ON 02/20/2007. ON 0/28/2007 THE RESPONDENTS WITHDREW THEIR APPEAL AND PAID THE EARLIER AWARD TO THE CLAIMANT ON 03/02/2007. PANEL FAILED TO PROVIDE ANY RATIONALE FOR THE AWARD GRANTED OR ANY EXPLANATION OR FINDINGS OF WRONGDOING AGAINST RESPONDENT