Ron Itin Facing $4 Million Investor Dispute
Ron Itin (CRD #: 2344151), a broker registered with E1 Asset Management, has been suspended by FINRA, according to his BrokerCheck record, accessed on July 10, 2023. Read on to learn more about his alleged conduct as a broker.
Pending Investor Disputes
On May 9 and June 12, 2023, two disputes were filed naming Ron Itin in undisclosed allegations. The May 9 dispute seeks $4 million in damages; both disputes are currently pending.
2022 FINRA Suspension
On October 18, 2022, Ron Itin consented to the entry of findings that he and E1 Asset Management allegedly failed to reasonably supervise the fairness of mark-ups the firm charged to retail customers through an undisclosed broker from January 2018 through June 2020.
According to a Letter of Acceptance, Waiver & Consent (AWC), Ron Itin allegedly approved E1 Asset Management’s written supervisory procedures (WSPs) which designated him as the principal responsible for reviewing mark-ups on client trades. The firm’s WSPs allegedly also listed factors relevant to the review process, including the price of the security being sold and the firm’s expenses for executing the transaction.
The AWC alleged that Ron Itin and the firm failed to reasonably consider the factors listed in the firm’s WSPs beyond the guideline that mark-ups should not exceed 5%.
During the relevant period, Ron Itin and E1 Asset Management allegedly failed to identify that the firm charged unfair and unreasonable mark-ups on 80 corporate bond transactions when trading for the firm’s own account. E1 Asset Management allegedly charged mark-ups of 3.75% even though the underlying security was allegedly widely available and the transaction incurred “minimal” expenses for the firm.
Alleged Degree of Mark-Up
In June 2018, Ron Itin and E1 Asset Management allegedly reviewed monthly reports from FINRA’s Trade Reporting and Compliance Engine (TRACE), which compared mark-ups charged by the firm on certain trades with those charged by other firms for similar products.
These reports allegedly revealed that E1 Asset Management charged a mark-up of up to 3.75% when the median mark-up was only 0.15% and over evidence of unreasonable mark-ups.
Following this review, Ron Itin and E1 Asset Management allegedly failed to take any steps to investigate whether their mark-ups were reasonable or fair. Their mark-ups allegedly cost clients $37,629.82 in excessive fees.
The AWC concluded that these allegations constituted violations of FINRA Rules 3110 and 2010 on the part of both Ron Itin and E1 Asset Management, as well as violations of FINRA Rules 2121 and 2010 on the part of E1 Asset Management.
FINRA Rule 3110
FINRA Rule 3110 requires firms to maintain systems of supervision in order to ensure their compliance with securities regulations. Firms must appoint supervisors and provide them with Written Supervisory Procedures (WSPs).
FINRA Rule 2010
FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.
FINRA Rule 2121
FINRA Rule 2121 provides guidelines for mark-ups on transactions executed by firms. The “5% Policy” is a guideline that mark-ups should be less than 5%. However, mark-ups which fall under this threshold are still subject to other factors that determine if they are fair, including the type, price, and market availability of a security.
Sanctions
Ron Itin consented to the following sanctions:
- $5,000 fine
- 1-month suspension
- Completion of 20 hours of education concerning supervisory responsibilities within 90 days of Notice of Acceptance of the AWC
His suspension ran from November 21, 2022, to December 20, 2022.
E1 Asset Management consented to the following sanctions:
- Censure
- Restitution of $37,629.82 plus interest
- Certification by a registered principal that the firm’s WSPs and supervisory system are reasonably designed to comply with FINRA Rule 2121, within 90 days of Notice of Acceptance of the AWC
You can read the full AWC here.
Tax Lien
On March 28, 2017, Ron Itin was subject to a tax lien of $81,413.
2015 FINRA Suspension
On June 5, 2015, Ron Itin consented to the entry of findings that he and E1 Asset Management allegedly failed to establish and maintain a reasonable supervisory system between July 2008 and 2012.
An AWC alleged that Ron Itin and Ahsan Shaikh, as principals of E1 Asset Management, failed to establish a supervisory system in the following ways:
- Failure to implement an adequate system for reviewing brokers’ electronic communications with the public
- Failure to reasonably review transactions to identify and prevent excessive trading in client accounts
- Failure to conduct suitability reviews of trading in new client accounts
- Failure to document suitability reviews and supervisory approvals of leveraged exchange-traded fund (ETF) transactions
- Failure to enforce the firm’s Heightened Supervision Program
Further, the AWC alleged that settlement agreements entered into by the firm and clients contained an ambiguous confidentiality clause that clients could have interpreted as prohibiting them from cooperating with securities regulators.
FINRA Rule 2111
FINRA Rule 2111 defines suitable investments as those that fit an investor’s profile. An investor’s profile includes information about their risk tolerance, financial goals, and tax status.
Investors who rely on their brokers for recommendations may be able to recover their losses through FINRA arbitration.
Sanctions
Ron Itin consented to a one-month suspension. His suspension ran from August 6 to September 5, 2015.
E1 Asset Management consented to the following sanctions:
- Censure
- In light of Ron Itin’s financial status, no monetary sanction was imposed.
You can read a copy of the AWC here.
Bankruptcy
On January 30, 2015, Ron Itin discharged a bankruptcy.
Background Information
Ron Itin has passed the following exams:
- Series 63 – Uniform Securities Agent State Law Examination
- Series 99TO – Operations Professional Examination
- SIE – Securities Industry Essentials Examination
- Series 7 – General Securities Representative Examination
- Series 14 – Compliance Officer Examination
- Series 27 – Financial and Operations Principal Examination
- Series 24 – General Securities Principal Examination
- Series 4 – Registered Options Principal Examination
Ron Itin is a registered broker in ten states, the District of Columbia, and the Virgin Islands.
He has also worked for the following firms:
- Clearing Services of America (CRD#:23623)
- IAR Securities Corporation (CRD#:5155)
- VTR Capital (CRD#:21404)
- J. Gregory & Company (CRD#:14892)
Kurta Law Can Help
If you worked with Ron Itin and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.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.
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