Ricky Mantei Investigated by SEC
Ricky Mantei (CRD #: 1098981), a broker registered with Centaurus Financial, was recently investigated by the SEC, according to his BrokerCheck record, accessed on August 28, 2022. Investors should note that Ricky Mantei has an especially high number of disclosures on his record – two regulatory actions and 40 investor disputes.
On June 28, 2022, Ricky Mantei received a Wells Notice from the Securities and Exchange Commission alleging violations with regard to a street sweep and certain curve steepener securities.
A street sweep is a stock offering that allows institutional investors the opportunity to purchase a large portion of a company’s ownership interest, generally at a higher price than the initial offering.
Curve steepeners attempt to profit on the gap between the interest rates of short-term and long-term bonds—a steep curve can generate high returns, whereas a flat one may lead to losses.
The SEC alleges that Ricky Mantei violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder.
The SEC further alleges that he aided and abetted or caused violations by Centaurus Financial of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder, and/or Section 15B(b) of the Securities Exchange Act by failing to supervise Centaurus Financial’s registered representatives who may have also violated securities laws.
What is a Wells Notice?
A Wells Notice notifies a broker that the SEC intends to bring charges against them, and gives them the opportunity to respond.
Securities Act of 1933
Section 17(a) of the Securities Act of 1933 forbids the use of fraudulent practices, devices, or schemes in relation to the interstate purchase and sale of securities. Misleading or false statements and the omission of facts are banned under this section.
Securities Exchange Act of 1934
Section 10(b) of the Securities Exchange Act of 1934 similarly prohibits the use of deceptive, manipulative, and otherwise fraudulent business practices. Rule 10b-5 specifically bans the use of false statements and omissions of fact to mislead investors.
Section 15B(b)(4)(E) states that the SEC can penalize brokers and dealers if they willfully aid, abet, fail to supervise, or otherwise cause other brokers or dealers to violate securities regulations.
On August 1, 2019, FINRA filed a complaint against Ricky Mantei alleging he willfully violated MSRB Rule G-17 by circumventing the supervisory system of his firm, J.P. Turner & Company, to effect a trade between firm clients.
According to the complaint, Ricky Mantei allegedly arranged for a third party to purchase an investment from one client and for his firm to repurchase that investment, which he then sold to another client.
FINRA alleged that these actions served to circumvent J.P. Turner & Company’s requirement that “cross-trades” between clients be identified as such on order tickets and for brokers to justify the fairness of these trades in writing. FINRA alleges that Risky Maintei effected these trades in a manner that allowed him to avoid identifying them as cross-trades.
A hearing panel decision on February 18, 2021, determined that these allegations constituted violations of FINRA Rule 2010 and MSRB Rule G-17.
This decision is currently on appeal.
FINRA Rule 2010
FINRA Rule 2010 requires brokers to uphold high standards of commercial honor and just and equitable principles of trade.
MSRB Rule G-17
MSRB Rule G-17 requires brokers, dealers, and municipal securities dealers and advisors to engage in fair dealing and prohibits them from engaging in unfair and deceptive practices.
Ricky Mantei faced the following sanctions:
- $15,000 fine
- 30-business day suspension from FINRA
Nineteen disputes filed from 2018-2021 alleged that Ricky Mantei recommended and misrepresented unsuitable investments. Sixteen of these disputes were collectively settled for approximately $505,700. One dispute, filed on August 10, 2020, is still pending.
On September 23, 2021, investors alleged that Ricky Manei recommended unsuitable, complex, high-risk investments. The investors sought $300,000 and the dispute settled for $70,000.
Ten disputes filed in 2019 named Rickey Mantei in allegations involving the misrepresentation of unsuitable investments and failure to supervise. These disputes were settled for $416,915.
In a dispute filed on April 26, 2019, alleged that Ricky Mantei engaged in negligent conduct and potentially fraudulent activity from 2012 through August 2017. The client sought $1 million in damages and received a settlement of $77,500.
FINRA Rule 2111
FINRA Rule 2111 requires that brokers tailor their investment recommendations to suit investors’ profiles. These profiles contain information such as investors’ investment goals, tax status, and age.
Investors who rely on brokers for recommendations may be able to recover their losses by seeking out FINRA arbitration.
FINRA Rule 2020
FINRA Rule 2020 forbids the use of deceptive, manipulative, or otherwise unethical tactics to influence the purchase or sale of securities. This includes misrepresentation of an investment’s potential rewards, requirements, or risks.
FINRA Rule 3110
FINRA Rule 3110 requires firms to establish systems of supervision to maintain their compliance with securities regulations.
Ricky Mantei has passed the following exams:
- Series 63 – Uniform Securities Agent State Law Examination
- SIE – Securities Industry Essentials Examination
- Series 31 – Futures Managed Funds Examination
- Series 5 – Interest Rate Options Examination
- Series 7 – General Securities Representative Examination
- Series 24 – General Securities Principal Examination
Ricky Mantei is a registered broker in Georgia, South Carolina, and Tennessee. He is also a registered investment adviser in South Carolina.
He has also worked for the following firms:
- J P Turner & Company Capital Management (CRD#:124446)
- J.P. Turner & Company (CRD#:43177)
- GunnAllen Financial (CRD#:17609)
- First Allied Securities (CRD#:32444)
- D.E. Frey & Company (CRD#:23595)
- Merrill Lynch, Pierce, Fenner & Smith (CRD#:7691)
Kurta Law Can Help
If you worked with Ricky Mantei and you have concerns about your investments, please contact us today at 877-600-0098 or email@example.com for a free consultation.
For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.