May 12, 2021
Extended Hearing Panel Decision
In an Extended Hearing Panel Decision released on February 18, 2021, the Financial Industry Regulatory Authority (FINRA) Office of Hearing Officers found that former registered representative Ricky Mantei violated several securities industry rules by circumventing his firm’s cross trade procedures and a prearranged trading prohibition.
In a Complaint filed by the FINRA Department of Enforcement, Mantei allegedly sold two customers’ positions in Wells Fargo and Citibank structured certificates of deposit (SCDs) and a third customer’s position in a Fresno municipal bond through cross trading. At the time, Mantei was associated with, owned, managed, and operated a branch office of JP Turner & Company Capital Management in Lexington, South Carolina, who required all registered representatives to sell these instruments from one customer to another in compliance with his firm’s cross trade policies. However, Mantei circumvented this policy by working with a third party to buy the selling firm customer’s investment with the understanding that Mantei would have the firm repurchase it a short time later. Once the firm repurchased the investment, Mantei then sold it to the buying firm customer at a higher price.
FINRA Department of Enforcement alleges that Mantei’s misconduct was inconsistent with “high standards of commercial honor and just and equitable principles of trade” and that he breached his fiduciary duty of fair dealing and engaged in unfair and deceptive trading practices.
The Extended Hearing Panel confirms the findings in the Complaint filed by FINRA Department of Enforcement, stating that many of Mantei’s arguments against any wrongdoing “miss the mark” and that the customer sales and purchases at issue were, in substance, cross trades subject to the firm’s cross trade procedures. Based on the foregoing, Mantei violated FINRA Rule 2010 and MSRB Rule G-17. The Extended Hearing Panel ordered Ricky Mantei to serve a 30-business day suspension from associating with any FINRA member firm in any capacity and to pay a $15,000 fine. Mantei was also ordered to pay the costs of the hearing, which totaled at $11,895.
As revealed on his FINRA BrokerCheck report, Mantei has eleven pending and settled customer disputes in 2020 alone. These customer disputes allege unsuitability and breach of fiduciary duty. Mantei is currently associated with Centaurus Financial, Inc. in Lexington, South Carolina and has been with the firm since May 2015.