Securities Arbitration Lawyer Blog
FINRA has suspended Ricky Alan Mantei from the securities industry for 30 business days. According to an Office of Hearing Officers (“OHO”) decision from February 18, 2021, Mantei violated his firm’s prearranged trading prohibition and circumvented its cross-trade procedures by directing prearranged trading with intermediaries in order to facilitate and disguise cross trades. Mantei was fined a total of $15,000 for violating FINRA Rule 2010 and MSRB Rule G-17.
If the OHO decision becomes FINRA’s final disciplinary action, Mantei’s 30-day suspension will run from April 19, 2021, to June 1, 2021.
If you have invested with Ricky Alan Mantei, contact New York securities arbitration lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.
OHO Decision
FINRA’s Enforcement filed a Complaint alleging that, while associated with J.P. Turner & Co. (“Firm”), Mantei sold two customers’ positions in structured certificates of deposit (“SCDs”) and a third customer’s position in a municipal bond.
According to the Complaint, Mantei did not sell these instruments directly from one customer to another in compliance with the Firm’s cross trade procedures. Nor did he sell the instruments out to the market in bona fide transactions. Instead, Mantei allegedly engineered a plan to sell the customers’ financial instruments to other Firm customers without it appearing that he had engaged in cross trades. The Complaint alleged that Mantei arranged for external third parties to buy each selling customer’s investment with the understanding that Mantei would have the Firm repurchase it a short time later. After Mantei caused the Firm to repurchase the investments, he then allegedly sold them to other Firm customers. According to the Complaint, each set of transactions was, in substance, a cross-trade between Firm customers.
This conduct violated the Firm’s prohibition on prearranged trading and bypassed its cross-trade procedures. For the trades involving SCDs, FINRA Enforcement alleged that Mantei’s conduct was inconsistent with high standards of commercial honor and just and equitable principles of trade. Regarding the municipal bond trades, it alleged that Mantei willfully breached his duty of fair dealing and engaged in a deceptive, dishonest, and unfair practice. By engaging in this conduct, Mantei violated FINRA Rule 2010 and MSRB Rule G-17.
Mantei filed an Answer denying Enforcement’s allegations, asserting affirmative defenses, and requesting a hearing. OHO held a hearing and found that FINRA Enforcement proved the violations charged.
FINRA Rule 2010 and MSRB Rule G-17
FINRA Rule 2010 requires that members and associated persons observe high standards of commercial honor and just and equitable principles of trade.
MSRB Rule G-17 provides that “[i]n the conduct of its municipal securities or municipal advisory activities, each broker, dealer, and municipal securities dealer shall deal fairly with all persons and shall not engage in any deceptive, dishonest, or unfair practices.” The Rule also applies to their associated persons.
What are Structured Certificates of Deposit?
Structured certificates of deposit (“SCDs”) are instruments that represent bank deposit obligations. Typically, SCDs pay a fixed interest rate for a specified period. Afterward, they pay periodic interest on a deposit amount determined by a formula set by the issuer. This formula may be correlated to an equity index or an interest rate benchmark, such as the London Inter-Bank Offered Rate (LIBOR). SCDs are not traded on an exchange, and SCD transactions might not be publicly reported.
The SCDs secondary market can be less liquid than for other products, and it can be harder to obtain pricing information about them.
Ricky Alan Mantei (CRD#: 1098981)
Mantei’s public record shows 38 disclosures, including 37 customer complaints. Mantei entered the securities industry in 1982 and has been registered with the following FINRA members:
- Centaurus Financial, Inc., Lexington, SC (May 19, 2015 – Present);
- J.P. Turner & Co., L.L.C., Lexington, SC (March 30, 2010 – June 15, 2015). The firm terminated or withdrew its registration on 2/4/2016;
- Gunnallen Financial, Inc., Lexington, SC (March 6, 2008 – March 29, 2010);
- First Allied Securities, Inc. Lexington, SC (October 3, 2000 – March 26, 2008);
- D.E. Frey & Company, Inc., Denver, CO (September 7, 1995 – October 24, 2000); and
- Merill Lynch, Pierce, Fenner & Smith Inc., New York, NY (March 2, 1983 – August 11, 1995).
While registered with J.P. Turner & Co, Mantei owned, managed, and operated a branch office in Lexington, SC, as well as five other offices. From 2014 through 2015, the Lexington, SC branch office employed 10 to 18 registered representatives.
The majority of customer accounts in the Lexington branch designated one of those brokers as the registered representative of record, and Mantei was her supervisor. According to the Firm’s Chief Compliance Officer, the accounts in the Lexington office were generally considered Mantei’s accounts. Mantei’s business started including SCDs around 2008. Mantei voluntarily resigned from the Firm on May 18, 2015.
How to Recover Losses or Obtain a Free Consultation
If you have invested with Ricky Alan Mantei, contact New York securities arbitration lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.
Iorio Altamirano LLP is a securities arbitration law firm based in New York, NY. We pursue FINRA arbitration claims nationwide on behalf of investors to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.