Spartan Capital Securities, LLC (CRD #146251, New York, New York), John Dennis Lowry (CRD #4336146, New York, New York), and Kim Marie Monchik (CRD #2528972, Hazlet, New Jersey)
The firm, Lowry, and Monchik appealed a National Adjudicatory Counsel (NAC) decision to the Securities and Exchange Commission (SEC). The firm was censured, fined $600,000, and required to disclose arbitration filings and dispositions and other customer complaints at issue; retain an independent consultant to review its policies, systems, and procedures relating to disclosures on Uniform Application for Securities Industry Registration or Transfer (Form U4) and Uniform Termination Notice for Securities Industry Registration (Form U5); and make required updates to its registered representatives, including, Lowry and Monchik’s, Forms U4 and U5. Lowry was fined $20,000, suspended from association with any FINRA member in all capacities for two years, and required to disclose required arbitration filings and dispositions on his Form U4.
Monchik was fined $10,000, suspended from association with any FINRA member in all capacities for two years, and required to disclose required arbitration filings and dispositions on her Form U4. The NAC affirmed the findings and modified the sanctions imposed by the Office of Hearing Officers (OHO). The sanctions were based on the findings that the firm failed to amend, or timely amend, the Form U4s and Form U5s of its registered representatives, including those of its executive officers, including Lowry and Monchik; to disclose the filing or disposition of customer arbitrations; the receipt or disposition of written customer complaints; and reportable financial events.
The findings stated that the firm’s failures to disclose reportable events involving its executive officers was willful because the firm knowingly and intentionally elected to not disclose customer arbitrations and dispositions of arbitrations against its executive officers, including Lowry and Monchik, by amending their Form U4s.
FINRA twice cautioned the firm that multiple arbitrations against Lowry and Monchik needed to be disclosed on their Forms U4. The findings also stated that Lowry willfully failed to amend his Form U4 to disclose, or timely disclose, the filing and disposition of customer arbitrations in which he was a named a respondent. The arbitrations naming Lowry resulted in 12 reportable awards and settlements totaling more than $1.6 million. Lowry was a party to all the settlements and awards.
The largest award was for $330,000 and the largest settlement was for $300,000, both of which Lowry disclosed untimely. Lowry never disclosed eight of the awards and settlements and disclosed four untimely. The findings also included that Monchik willfully failed to amend her Form U4 to disclose, or timely disclose, the filing and disposition of customer arbitrations in which she was a named a respondent.
Monchik was named as a respondent in 12 arbitrations alleging that she failed to supervise one or more registered representatives who committed sales practice violations. Monchik failed to disclose 11 arbitrations and untimely disclosed one arbitration 562 days late. The arbitrations in which Monchik was named resulted in awards or settlements totaling more than $360,000. Monchik never disclosed two settlements, and she disclosed one award late. The sanctions are not in effect pending review. (FINRA Case #2019061528001)