UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC IA Release 4939, June 8, 2018: The Securities and Exchange Commission (Commission) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 (Advisers Act) against Larry Werbel (Werbel). On the basis of this Order and Werbel's Offer, the Commission finds that on September 15, 2017, Werbel pled guilty to one count of conspiracy to commit securities fraud in violation of Title 18, United States Code, Section 371 and one count of investment adviser fraud in violation of Title 15, United States Code, Section 80b-6 before the United States District Court for the Southern District of New York, in United States v. Larry Werbel, Crim. No. 1:15-cr-171. In connection with that plea, Werbel admitted, among other things, that: from at least 2010 through March 2015, he was a registered investment adviser with an office in Cleveland, Ohio; from at least 2011 through 2014 he introduced his clients to an investment opportunity; he willfully failed to tell these clients that he was being compensated to recommend the purchase of the securities; this compensation agreement was an agreement with a codefendant in the case; he also failed to inform these clients that the entity he directed his clients to send their money for the purchase of the securities, was run and controlled by the codefendant in the case, who Werbel knew at the time as a convicted felon; he met with the codefendant in the case in connection with his compensation agreement to discuss his clients' investment opportunities in the securities; and when he engaged in this conduct he knew it was wrong.

Order

Bar (Permanent)

broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or NRSRO

Indefinite

6/8/2018

Client is alleging suitability, negligence, and a failure to supervise in relation to annuity investments made in July of 2015.

$200,000.00

$125,000.00

Werbel was named in a customer complaint that asserted the following causes of action: breach of duty of loyalty, negligence, fraud, respondeat superior, and negligent supervision.

$778,119.36

CUSTOMER ALLEGES UNSUITABLE PENNY STOCK TRADING AND FAILURE TO DISCLOSE HIGH RISK STRATEGY.

$19,995.60

$17,000.00

FINRA

Respondent Werbel 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

Any capacity

n/a

6/7/2016

Pursuant to Article VI, Section 3 of FINRA By-Laws, and FINRA Rule 9554, Respondent Werbel is suspended on June 7, 2016 for failure 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.

FINRA

Respondent Werbel failed to respond to FINRA request for information.

Letter

Bar (Permanent)

All Capacities

Indefinite

8/16/2016

Pursuant to FINRA Rule 9552(h) and in accordance with FINRA's Notice of Suspension and Suspension from Association letters dated May 12, 2016 and June 6, 2016, respectively, on August 16, 2016, Werbel is barred from association with any FINRA member in any capacity. Respondent failed to request termination of his suspension within three months of the date of the Notice of Suspension; therefore, he is automatically barred from association with any FINRA member in any capacity.

PLAINTIFFS ALLEGE THAT FA RECOMMENDED TWO UNSUITABLE SECURITIES CAUSING LOSSES. ACTIVITY PERIOD NOVEMBER 2010 THROUGH FEBRUARY 2011.

$74,518.00

$48,580.00

Received as a letter from lawyer with no allegations just a statement that rep was indicted is US District Court stating a Time Period March 2011 to December 2014.

$60,000.00

Concorde Investment Services, LLC

Discharged

Discharged after internal review initiated upon learning Rep was indicted for defrauding investors prior to association with the firm.

Concorde Investment Services, LLC

Discharged

Discharged after internal review initiated upon learning Rep was indicted for defrauding investors prior to association with the firm.

FRAUD BY WIRE, RADIO, OR TELEVISION

Dismissed

ATTEMPT AND CONSPIRACY TO COMMIT WIRE FRAUD

Dismissed

CONSPIRACY TO COMMIT SECURITIES FRAUD

Pled guilty

MANIPULATIVE AND DECEPTIVE DEVICES (SECURITIES FRAUD)

Dismissed

DISCLOSURE OF INFORMATION BY COMMISSION (INVESTMENT ADVISOR FRAUD)

Pled guilty

STATEMENTS OR ENTRIES GENERALLY (FALSE STATEMENTS)

Dismissed

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

The SEC alleges that from 2012 to 2014, a recidivist securities law violator defrauded at least 50 relatively unsophisticated investors out of at least $11 million through the sale of securities of VGTel, Inc. ("VGTel"), a shell company he controlled. The recidivist securities law violator sold approximately six million shares of VGTel stock to investors using a fictitious name to hide his criminal past and lying to investors regarding the use of stock sale proceeds. The recidivist securities law violator also bribed Werbel and another individual, the managing member of Evolution Partners, who advised their clients to purchase VGTel stock without disclosing to their clients that they had been bribed. The recidivist securities law violator also engaged in matched trading of VGTel stock with a stockbroker to artificially control the stock's market price. Werbel is liable for having aided and abetted in violations of Section 17(a) of the Securities Act and Sections 206(1) and 206(2) of the Advisers Act. Werbel is also liable for violations of Section 10(b) of the Exchange Act and Rule 10b-5 and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.

Judgment Rendered

Injunction

Negligence and unsuitability in recommendation of penny stocks VGTL and QLTS. Activities occurred from 2010 to August 2013.

$661,800.00

SUMMIT BROKERAGE SERVICES INC

Permitted to Resign

REPRESENTATIVE WAS PERMITTED TO RESIGN AFTER CUSTOMER INITIATED ARBITRATION WAS FILED BUT BEFORE THE FIRM'S RESULTING INTERNAL REVIEW WAS COMPLETED

ARBITRATION ALLEGATIONS: TRADES IN VGTEL IN 2013: SELLING AWAY; CONVERSION OF PROPERTY; FRAUD

$1,000,000.00

$185,138.61

ORIGINAL COMPLAINT WAS ABOUT A VARIABLE ANNUITY: IN ADDITION TO HAVING AN ATTORNEY WRITE A LETTER ON HER BEHALF IN THE ORIGINAL CUSTOMER COMPLAINT ABOUT A VARIABLE ANNUITY THE CLIENT WROTE LETTER TO JACKSON NATIONAL ALLEGING: CHURNING COMMISSIONS IN VARIOUS ANNUITY PRODUCTS BY REINVESTING PARTIAL SURRENDER FUNDS AND 1035 EXCHANGE FUNDS (2) THE ARBITRATION CLAIM FOR SAME CLIENT ALLEGES PENNY STOCK TRADING.

FINRA

WITHOUT ADMITTING OR DENYING THE FINDINGS, WERBEL CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT HE SOLICITED CUSTOMERS TO INVEST IN A LOW-PRICED SECURITY, WHICH WERBEL HIMSELF HAD PREVIOUSLY PURCHASED. WERBEL LEARNED OF THE STOCK FROM A THIRD-PARTY STOCK PROMOTER. THE FINDINGS STATED THAT WERBEL'S MEMBER FIRM PROHIBITED THE SOLICITATION OF LOW-PRICED SECURITIES. DESPITE SOLICITING THE CUSTOMERS' PURCHASES OF THE SECURITY, WERBEL IMPROPERLY CODED THE TRANSACTIONS AS UNSOLICITED AND CONSEQUENTLY CAUSED THE FIRM'S BOOKS AND RECORDS TO BE INACCURATE IN VIOLATION OF RULES 17A-3 AND 17A-4 OF THE SECURITIES EXCHANGE ACT OF 1934. AFTER THE CUSTOMERS PURCHASED THE SECURITY IN THEIR FIRM ACCOUNTS, WERBEL DISCLOSED THEIR NON-PUBLIC PERSONAL INFORMATION REGARDING THEIR CORRESPONDING SECURITIES TRANSACTIONS TO THE NON-AFFILIATED THIRD-PARTY STOCK PROMOTER FOR THE PURPOSE OF DETERMINING WHETHER THESE CUSTOMERS WERE ELIGIBLE TO RECEIVE ADDITIONAL SHARES OF STOCK. AS A RESULT OF THE INFORMATION WERBEL PROVIDED TO THE THIRD-PARTY STOCK PROMOTER CONCERNING THE CUSTOMERS' TRANSACTIONS, AT LEAST FIVE CUSTOMERS RECEIVED ADDITIONAL SHARES THROUGH THE MAIL. WERBEL ALSO RECEIVED ADDITIONAL SHARES IN CONNECTION WITH HIS PERSONAL TRANSACTIONS IN THE SECURITY. THE FINDINGS ALSO STATED THAT THE SHARES WERE NOT OBTAINED THROUGH TRANSACTIONS AT THE FIRM, AND THE TRANSACTIONS WERE NOT RECORDED ON THE FIRM'S BOOKS AND RECORDS. WERBEL DID NOT GIVE ANY PRIOR NOTIFICATION, WRITTEN OR OTHERWISE, TO THE FIRM REGARDING THE TRANSACTIONS AWAY FROM THE FIRM THROUGH THE THIRD-PARTY STOCK PROMOTER AND HE DID NOT RECEIVE ANY APPROVAL FROM THE FIRM TO ENGAGE IN THE TRANSACTIONS AWAY FROM THE FIRM. IN ADDITION TO HIS TRANSACTIONS IN THE LOW-PRICED SECURITY, WERBEL PURCHASED SHARES OF ANOTHER COMPANY FROM THE THIRD-PARTY STOCK PROMOTER. WERBEL SENT A WIRE FROM HIS FIRM ACCOUNT TO THE THIRD-PARTY STOCK PROMOTER AND PURCHASED SHARES DIRECTLY FROM THE STOCK PROMOTER. WERBEL'S TRANSACTION IN THE STOCK WAS NOT RECORDED ON THE FIRM'S BOOKS AND RECORDS. WERBEL GAVE NO PRIOR WRITTEN NOTICE REGARDING HIS PURCHASE OF THE STOCK AND DID NOT RECEIVE APPROVAL FROM THE FIRM TO ENGAGE IN THE TRANSACTION.

Acceptance, Waiver & Consent(AWC)

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

$12,500.00

Suspension

ANY CAPACITY

TWO MONTHS

4/7/2014

6/6/2014

LPL FINANCIAL LLC

Discharged

WITHOUT THE FIRM'S KNOWLEDGE, AND IN VIOLATION OF FIRM POLICIES AND PROCEDURES, PRIVATELY BUYING STOCK FOR HIS CLIENTS AT A GUARANTEED PRICE AWAY FROM THE FIRM.

IN OCTOBER AND NOVEMBER OF 2010 I PURCHASED QLTS STOCK FOR CLIENTS. ALL OF THESE TRADES WERE PLACED THROUGH ONLINE TRADING AT LPL WHICH IS SELF CLEARING. THE PRICE OF THE STOCK WAS NOT GUARANTEED IT WAS BASED ON DWAP (DAILY WEIGHTED AVERAGE PRICE) FOR THE SHARES THAT EACH CLIENT PURCHASED. I DISCUSSED ALL THE TRADES WITH THE CLIENTS PRIOR TO PURCHASE. THERE WAS NEVER A CUSTOMER COMPLAINT FROM THE CLIENTS. ALL SHARES OF THE STOCK WERE PURCHASED THROUGH LPL AND THE STOCK CERTIFICATES WERE DEPOSITED INTO THE RESPECTIVE ACCOUNTS AT LPL. THERE WAS NO SELLING AWAY AS ALL TRANSACTIONS WERE AT LPL AND ON THEIR SYSTEMS. COPIES OF CONFIRMS AND STOCK CERTIFICATES AVAILABLE.