New Jersey Bureau of Securities

WEISBROD IS THE SUBJECT OF AN ORDER OF A SELF-REGULATORY ORGANIZATION EXPELLING HIM FROM A SELF-REGULATORY ORGANIZATION. WEISBROD ENGAGED IN DISHONEST OR UNETHICAL PRACTICES IN THE SECURITIES BUSINESS.

Order

Revocation

All exemptions contained in N.J.S.A. 49:3-50 subsection (a) paragraph 9, 10, and 11, and subsection (b), are hereby DENIED as to William Henry Weisbrod. 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 herspy DENIED as to William Henry Weisbrod.

FINRA

Without admitting or denying the findings, Weisbrod consented to the sanctions and to the entry of findings that he breached fiduciary duties owed to a community bank for which he served as an advisory director and consultant. The findings stated that the bank was a customer of Weisbrod's member firm and relied upon his investment knowledge and experience to determine its investment strategy. Weisbrod breached his fiduciary duties to the bank by directing it to engage in an investment strategy that generated revenue for Weisbrod but exposed the bank to excessive risk and unnecessary trading costs. At Weisbrod's recommendation, the bank opened brokerage accounts at the firm with a registered representative who worked in the same office as Weisbrod. Although Weisbrod represented to the firm that he would not be involved with the bank's investments through it, Weisbrod directed the trading in the bank's accounts. Weisbrod recommended that the bank engage in a risky trading strategy involving fixed-income securities purchased through the firm. Weisbrod's trading generated over $1 million in commissions for the registered representative assigned to the bank's accounts, who directed more than $370,000 of these commissions to Weisbrod, through a series of payments that Weisbrod did not disclose to the bank. Weisbrod recommended that the bank trade through the firm even though it lacked a fixed-income trading desk. Because the firm lacked a fixed-income trading desk, it had to use a third-party "broker's broker" to acquire fixed-income securities for the bank, which caused the bank to pay approximately $1.25 million in additional markups to the broker's broker. Weisbrod did not disclose these markups to the bank. As a result of Weisbrod's trading strategy, the bank spent more than $600,000 to remediate the risk of its investment portfolio. The findings also stated that Weisbrod falsely represented to the firm that he was not involved with the bank's investments through it in connection with the firm's inquiry into his OBA involving the bank.

Acceptance, Waiver & Consent(AWC)

Bar (Permanent)

All capacities

Indefinite

8/2/2023

Alleges breach of fiduciary duty, fraud, and unsuitable transactions.

$12,000,000.00

$425,000.00

**** DRP filed in error

WACHOVIA SECURITIES

Discharged

ALLEGED VIOLATIONS OF NASD CONDUCT RULES 2310 AND 2110 RELATED TO WEISBROD'S PURCHASE OF APPROXIMATELY $2 MILLION OF UNSUITABLE CLASS B MUTUAL FUND TRANSACTIONS IN CLIENT'S ACCOUNT

FINRA

NASD RULES 2110, 2310, INTERPRETATIVE MATERIAL-2310-2 AND INTERPRETATIVE MATERIAL-2830-1: RESPONDENT WILLIAM WEISBROD RECOMMENDED AND EFFECTED UNSUITABLE TRANSACTIONS IN A CUSTOMER'S ACCOUNTS INVOLVING CLASS B MUTUAL FUND SHARES WITHOUT HAVING REASONABLE GROUNDS FOR BELIEVING THAT THE TRANSACTIONS WERE SUITABLE, GIVEN THE TOTAL DOLLAR AMOUNT OF CLASS B MUTUAL FUND SHARES PURCHASED AND THE CUSTOMER'S FINANCIAL SITUATION AND NEEDS. WEISBROD ENTERED THIS LEVEL OF CLASS B MUTUAL FUND TRANSACTIONS, WHICH WAS NOT PERMITTED BY HIS MEMBER FIRM, IN A MANNER DESIGNED TO EVADE FIRM POLICY AND CIRCUMVENT ITS SUPERVISORY CONTROLS. WEISBROD'S FIRM REQUIRED PRE-APPROVAL OF CLASS B SHARE PURCHASES IN EXCESS OF $100,000. WEISBROD ATTEMPTED TO CIRCUMVENT HIS FIRM'S PRE-APPROVAL POLICY AND SUPERVISORY CONTROLS BY ENTERING ALMOST ALL THE TRADES IN HIS CUSTOMERS' ACCOUNTS IN AMOUNTS OF $90,000 OR LESS.

Acceptance, Waiver & Consent(AWC)

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

Suspension

WITHOUT ADMITTING OR DENYING THE FINDINGS, WEISBROD CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS; THEREFORE, WEISBROD IS FINED $33,500, OF WHICH $23,500 REPRESENTS DISGORGEMENT OF COMMISSIONS EARNED BY WEISBROD ON THE UNSUITABLE TRANSACTIONS ENTERED IN THE CUSTOMER'S ACCOUNTS, AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN ANY CAPACITY FOR TWO MONTHS. THE SUSPENSION IS IN EFFECT FROM FEBRUARY 17, 2009 THROUGH APRIL 16, 2009. FINES PAID ON 01/26/2009.

THE CLIENT ALLEGED PURCHASES OF UNSUITABLE MUTUAL FUND SHARE CLASSES AND TRADING FOR COMMISSIONS - FEBRUARY THROUGH AUGUST 2002.

$120,000.00