Timothy DiBlasi Under FINRA Scrutiny for Lack of Compliance Supervision

Disciplinary action is pending as DiBlasi’s involvement in the sale of over 74 million shares of unregistered stock is investigated

After 11 years in the securities industry, Timothy D. DiBlasi may be facing a FINRA disciplinary action for his alleged involvement in the sale of more than 74 million unregistered stock shares. As the chief compliance officer at Scottsdale Capital Advisors, FINRA alleged that he failed to enforce a system of supervision and anti-money laundering compliance, leading to the alleged illicit trades.

DiBlasi has been registered with the firm since 2012, and FINRA is implicating him in the case due to his failure to prevent fraud and illicit activity relating to a penny stock, according to the report. Since October 2013, DiBlasi has served as the chief compliance officer at Scottsdale, making him responsible for written supervisory procedures, or WSPs, which detail how supervisors should handle any “red flags” that suggest improper trading activity, particularly in regards to unregistered securities. However, according to FINRA, DiBlasi’s system was not up to par when it came to verifying ownership of securities and their registration exemptions.

Scottsdale’s written procedures failed to require a “reasonable inquiry” into the ownership of securities and did not provide its employees with guidance on handling any red flags that may appear, according to the FINRA report. Having such inadequate standards by which to supervise trading put the firm in violation of NASD rules regarding WSPs.

DiBlasi has one prior disclosure, a financial incident with Bank of America in which they reached a compromise to prevent his declaration of bankruptcy due to financial hardship upon moving from New Jersey to Arizona, according to FINRA records.

As an investor, you have rights. If you’ve been wronged by Timothy DiBlasi or any other financial advisor, you may be entitled to loss recovery through securities arbitration. Selecting an experienced securities attorney well versed in securities arbitration with a strong track record in successfully recovering client losses is crucial.

The attorneys at Silver Law Group represent investors nationwide and are committed to helping investors recover investment losses due to stockbroker misconduct through securities arbitration. Our consultations are free and the firm is compensated only when we are successful. Contact us today to start pursuing your rights.