NASD Regulation Bars Nicholas Rudi; Key Figure in Armacon Probe also Censured and Fined for Failure to Cooperate
Washington, D.C.—NASD Regulation, Inc., today announced that it has barred Nicholas A. Rudi, the former President and Financial Operations Principal of Armacon Securities Inc., for failing to cooperate with an NASD RegulationSM investigation. Rudi was also fined $20,000 and censured.
The decision barring Rudi by NASD Regulation’s National Business Conduct Committee (NBCC), the regulatory organization’s appellate body, affirmed an August 1, 1997, decision by NASD Regulation’s District Business Conduct Committee (DBCC) for District 9 (Philadelphia). Rudi appealed the initial decision to the NBCC. The bar is effective immediately.
Under NASD Regulation rules, all registered brokers are required to provide information on request. Failure to do so can result in sanctions, up to and including being barred from the securities industry. The NBCC decision added that failure to provide information fully and promptly undermines the National Association of Securities Dealers’ (NASD®) ability to carry out its regulatory mandate.
In the course of NASD Regulation’s investigation into whether Armacon violated federal securities laws or NASD Regulation rules by receiving illegal payments from brokerage firms or registered brokers, Rudi was called on to provide on-the-record interviews with NASD Regulation investigators. To date, investigators have focused on Armacon’s activities between 1991 and 1993.
In numerous attempts to arrange interviews with Rudi and his lawyer, specific dates and times for interviews with NASD Regulation were scheduled – and Rudi subsequently failed to appear at any of them. A full chronology of NASD Regulation’s efforts to schedule an interview with Rudi is part of the NBCC’s decision, which is publicly available.
Rudi registered with the NASD in February 1991. He was terminated from Armacon in May 1995, and has not worked in the securities industry since then. Shortly after receiving subpoenas from the Department of Justice and the Securities and Exchange Commission (SEC), Armacon voluntarily suspended its business activities in February 1995. NASD Regulation retains disciplinary jurisdiction over all registered brokers for two years after they leave the industry.
NASD Regulation oversees all U.S. stockbrokers and brokerage firms. NASD Regulation, and The Nasdaq Stock Market, Inc., are subsidiaries of the National Association of Securities Dealers, Inc., the largest securities-industry self-regulatory organization in the United States.