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Ron Itin Suspended by FINRA Over Alleged Failure to Supervise

Dec 16, 2022 Failure to Supervise

Ron Itin (CRD #: 2344151), a broker registered with E1 Asset Management, has been suspended by FINRA, according to his BrokerCheck record, accessed on November 29, 2022. Read on to learn more about his conduct as a broker.

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%. 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 began on November 21, 2022, and will end on December 20, 2022.

You can read the full AWC here.

Tax Lien

On March 28, 2017, Ron Itin was subject to a tax lien of $81,413.

Bankruptcy

On January 30, 2015, Ron Itin’s bankruptcy was discharged.

Background Information

Ron Itin has passed the following exams:

  • Series 63 – Uniform Securities Agent State Law Examination
  • SIE – Securities Industry Essentials Examination
  • Series 7 – General Securities Representative 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.