February 24, 2016
On February 17, 2016, registered representative John P. Schwan (CRD# 1421895), who does business as Schwan Financial Group, LLC of Aberdeen, South Dakota, entered into a Letter of Acceptance, Waiver and Consent (AWC) to resolve allegations FINRA made against him regarding violations of securities industry rules.
John Schwan, formerly associated with Cambridge Investment Research, Inc. and currently associated with Kovack Securities, Inc., consented, without admitting or denying the allegations made against him by FINRA, to a two-month suspension from associating with any FINRA member firm in any capacity and a fine of $20,000 in resolution of FINRA Disciplinary Proceeding No. 2010023826303. In the AWC, FINRA alleged that “[f]rom November 2009 to May 2010, Schwan violated NASD Rule 3040 and FINRA Rule 2010 by participating in private securities transactions, not for compensation, without providing prior written notice to, or receiving prior written approval from, his Firm [Cambridge Investment Research, Inc., at that time]. From January 2008 to July 2010, Schwan violated NASD Rules 3030 and 2110 (for conduct prior to December 15, 2008) and FINRA Rule 2010 (for conduct after December 14, 2008) by engaging in outside business activities for compensation without providing prior written notice to Cambridge.”
According to FINRA’s allegations, Schwan and his associate, Michael Duch, were involved in the solicitation of two Cambridge customers for purchases of interests in Running Spring Oil and Gas, L.P. Purportedly, Running Spring Oil and Gas, L.P. was “a limited partnership formed in 2009 for the purpose of generating oil and gas investments in the Bakken Region of North Dakota.” Additionally, FINRA alleged that Schwan and Duch solicited investments in Obele Energy LP and MVIS Notes.
A review of Schwan’s FINRA BrokerCheck Report reveals that he was discharged by Cambridge Investment Research Inc. on July 14, 2010 because he “did not notify firm of all outside business activities.”
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