Broker-Dealer Litigation - Greenberg Traurig LLP

testimony, barred him from association. The National Adjudicatory Council affirmed the
hearing panel’s findings of violation and the bar. However, it overturned the fine and suspension
in light of the bar imposed on Houston.
The Commission sustained the findings of violations, but vacated the sanction and
remanded for redetermination of the sanction. The Commission explained that Houston did
respond in some manner to the NASD’s information requests, and therefore the determination of
the sanction should analyze factors other than the presumptive unfitness indicated by a failure to
respond in any manner.
(vi)
Right to Counsel
No cases decided in 2011.
k. Statutory Disqualification
Q.2.k
In re Bahl, Release No. 65323, 2011 SEC LEXIS 3182 (Sept. 12, 2011).
The Commission considered FINRA’s application for an order allowing Bahl to be
associated with a registered broker-dealer. In 1974, the Commission had barred Bahl from
association with a broker-dealer except as a supervised person in a non-supervisory capacity, and
upon a satisfactory showing to the Commission’s Division of Enforcement that a firm would
adequately supervise him. The order further subjected Bahl to a statutory disqualification under
Section 3(a)(39)(B) of the Securities Exchange Act of 1934. In a parallel proceeding, a federal
district court permanently enjoined Bahl from further violations of the federal securities laws
relating to fraud in prospectus delivery. Thereafter, Bahl was associated with two brokerdealers.
In each case, FINRA’s CRD failed to identify Bahl as being subject to a statutory
disqualification, and as a result, FINRA did not file the required notifications with the
Commission pursuant to Rule 19h-1 of the Exchange Act on behalf of Mr. Bahl for these two
associations. FINRA’s application sought to allow Bahl to be associated with a registered
broker-dealer as a general securities principal working out of his home subject to heightened
remote supervision. The Commission approved FINRA’s application.
l. Reporting Violations
In re Gremo Invs., Inc., Release No. 64481, 2011 SEC LEXIS 1695 (May 12, 2011).
The Commission considered an appeal by Gremo Investments, Inc., a registered brokerdealer,
of a FINRA disciplinary decision. A FINRA hearing panel had suspended Gremo’s
membership, imposed a $1,000 fine and assessed $1,605 in costs after finding that Gremo
violated Section 17(e) of the Securities Exchange Act of 1934 and Rule 17a-5 thereunder, and
Q.2.l
446