Proceeding Number 2011025506901
Extended Hearing Panel Decision in Department of Enforcement v. Richard Hans Bach
December 27, 2013
The Extended Hearing Panel finds that Respondent committed multiple violations of FINRA's Rules, and imposes eight separate bars in all capacities. Respondent is statutorily disqualified for willfully causing his firm to file a false Form BD.
The Extended Hearing Panel finds that Respondent:
- Violated FINRA Rule 2010 by causing his firm to violate the Net Capital Rule by engaging in securities transactions when it had a net capital deficiency;
- Violated FINRA Rule 2010 by causing his firm to violate the Customer Protection Rule by failing to perform reserve calculations and by failing to obtain a "no-lien letter" from the bank where his firm maintained a reserve account;
- Violated FINRA Rule 2010 by misrepresenting to a clearing firm that Respondent's firm would be clearing only proprietary trades, when Respondent intended to deposit customer assets in the account;
- Violated FINRA Rules 1122 and 2010 by filing a false Form BD;
- Violated NASD Rule 1017 and FINRA Rule 2010 by causing his firm to violate its FINRA membership agreement by failing to obtain FINRA approval for a material change in its business operations;
- Violated NASD Rule 3110 and FINRA Rule 2010 by causing his firm to fail to make and keep current order memoranda for trades by the firm's holding company and others;
- Violated FINRA Rules 8210 and 2010 by failing to submit timely and complete responses to requests for documents and information;
- Violated FINRA Rules 2150 and 2010 by failing to deliver securities to a customer despite repeated requests;
- Violated NASD Rule 2330(b) and FINRA Rule 2010 by failing to maintain physical possession or control of customers' fully paid stock; and
- Violated FINRA Rules 2150 and 2010 by refusing to return a free credit balance to a customer despite repeated requests for the funds.