Securities Arbitration Lawyers BlogTimothy 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.