Initiated By
FINRA
Allegations
FINRA RULE 2010, NASD RULES 1031, 2210(D)(1)(A), 2210(D)(1)(B), 2310, 3040: WHILE EMPLOYED AT A MEMBER FIRM, CAMARILLO ENTERED INTO A CONTRACT WITH A COMPANY AND SOLD APPROXIMATELY $370,000 WORTH OF PRIVATE SECURITIES TO HIS CUSTOMERS, RECEIVING OVER $13,000 IN COMMISSIONS. THE SECURITIES WERE MARKETED AND SOLD AS AN INVESTMENT OF MONEY, POOLED TOGETHER WITH OTHER INVESTOR FUNDS AS PART OF A COMMON ENTERPRISE, WHERE INVESTORS WERE GUARANTEED HIGH RETURNS BASED UPON THE EFFORTS OF THE COMPANY AND ITS THIRD PARTY MANAGER OVERSEEING THE INVESTMENT TRUST. HIS FIRM'S WRITTEN PROCEDURES, WHICH CAMARILLO ATTESTED TO READING AND UNDERSTANDING, INSTRUCTED EMPLOYEES TO PROVIDE NOTICE TO THE FIRM'S COMPLIANCE DEPARTMENT, AND TO SEEK WRITTEN APPROVAL FROM THE FIRM, PRIOR TO ENGAGING IN ANY SECURITIES TRANSACTIONS THAT WERE NOT EXECUTED THROUGH THE FIRM. CAMARILLO ENTERED INTO THE CONTRACT WITH THE COMPANY, WITHOUT PROVIDING NOTICE TO HIS FIRM, OR RECEIVING APPROVAL FROM, HIS FIRM. THE COMPANY PROVIDED CAMARILLO WITH SALES LITERATURE AND WITHOUT SUBMITTING THE BROCHURE TO HIS FIRM FOR APPROVAL, CAMARILLO DISTRIBUTED THE BROCHURE TO HIS CUSTOMERS. THE BROCHURE CONTAINED SEVERAL UNWARRANTED, EXAGGERATED, AND MISLEADING STATEMENTS, OMITTED MATERIAL FACTS, AND IGNORED RISK WHILE GUARANTEEING SUCCESS. CAMARILLO DID NOT HAVE A REASONABLE BASIS TO RECOMMEND THAT HIS CUSTOMERS PURCHASE THE SECURITIES. CAMARILLO HAD NO EXPERIENCE SELLING THE TYPES OF PRODUCTS AND HE DID NOT CONDUCT PROPER DUE DILIGENCE. CAMARILLO DID NOT SUFFICIENTLY UNDERSTAND THE PRODUCTS OFFERED THROUGH THE COMPANY NOR HOW THE INVESTMENTS WERE MANAGED. ALL OF CAMARILLO'S CUSTOMERS WHO INVESTED IN THE PRODUCTS INFORMED CAMARILLO THAT THEY WERE SEEKING PRESERVATION OF CAPITAL AND VIEWED THE INVESTMENTS AS A RETIREMENT INVESTMENT. BECAUSE CAMARILLO DID NOT INVESTIGATE THE CLAIMS MADE IN THE SALES LITERATURE THAT THE RETURNS WERE GUARANTEED, HE HAD NO BASIS TO RECOMMEND THE INVESTMENT TO CUSTOMERS SEEKING PRESERVATION OF CAPITAL, AND HIS RECOMMENDATIONS TO INVEST IN THE COMPANY WERE UNSUITABLE. CAMARILLO'S CUSTOMERS LOST TENS OF THOUSANDS OF DOLLARS BY RELYING ON HIS RECOMMENDATION, BECAUSE EVEN AFTER PARTIAL REIMBURSEMENT FROM THE COMPANY'S COURT-ORDERED RECEIVERSHIP, CAMARILLO'S CUSTOMERS ONLY RECOUPED 69% OF THEIR INVESTMENT. FURTHER, THE PRODUCTS, AS MARKETED, WERE SECURITIES, THE SALE OF WHICH REQUIRED CAMARILLO TO POSSESS A SERIES 7 LICENSE. AT THE TIME HE SOLD THE SECURITIES, CAMARILLO HELD ONLY A SERIES 6 LICENSE.
Resolution
Decision & Order of Offer of Settlement
Sanctions
Civil and Administrative Penalty(ies)/Fine(s)
Amount
$10,000.00
Sanctions
Restitution
Amount
$13,000.00
Sanctions
Suspension
Registration Capacities Affected
ALL CAPACITIES
Duration
FOUR MONTHS
Start Date
6/20/2011
End Date
10/19/2011
Regulator Statement
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, CAMARILLO CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE HE IS FINED $10,000, SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR FOUR MONTHS, AND ORDERED TO PAY $13,000 IN RESTITUTION TO A CUSTOMER. THE FINE AND RESTITUTION SHALL BE DUE AND PAYABLE EITHER IMMEDIATELY UPON REASSOCIATION WITH A MEMBER FIRM FOLLOWING THE FOUR MONTH SUSPENSION, OR PRIOR TO ANY APPLICATION OR REQUEST FOR RELIEF FROM ANY STATUTORY DISQUALIFICATION RESULTING FROM THIS OR ANY OTHER EVENT OR PROCEEDING, WHICHEVER IS EARLIER. THE SUSPENSION IS IN EFFECT JUNE 20, 2011 THROUGH OCTOBER 19, 2011.
Broker Comment
Without admitting or denying the allegations, CAMARILLO CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE HE IS FINED $10,000, SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR FOUR MONTHS, AND ORDERED TO PAY $13,000 IN RESTITUTION TO A CUSTOMER. THE FINE AND RESTITUTION SHALL BE DUE AND PAYABLE EITHER IMMEDIATELY UPON REASSOCIATION WITH A MEMBER FIRM FOLLOWING THE FOUR MONTH SUSPENSION, OR PRIOR TO ANY APPLICATION OR REQUEST FOR RELIEF FROM ANY STATUTORY DISQUALIFICATION RESULTING FROM THIS OR ANY OTHER EVENT OR PROCEEDING, WHICHEVER IS EARLIER. THE SUSPENSION was IN EFFECT JUNE 20, 2011 through OCTOBER 19, 2011.