Network 1 Financial Securities, Inc. (CRD# 13577) (SEC# 8-29471) | Cold Spring Advisory Group

Network 1 Financial Securities, Inc. (CRD# 13577) (SEC# 8-29471)

Network 1 Financial Securities, Inc., is a brokerage firm located at 2 Bridge Avenue, Red Bank, New Jersey, 07701. It was formed in Texas in 1983 and was registered with the Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) and the National Association of Securities Dealers on August 17, 1983.

Network 1's FINRA BrokerCheck report lists 13 regulatory events and 2 arbitrations. Most recently, in 2011, Network 1 was censured and fined $12,500 for executing short sales and for failing to report 20 of those transactions as a short sale on the corresponding order ticket.  Network 1 agreed to pay the fine, the payment of which was completed on May 20, 2013, but refused to admit or deny the findings.

In 2010, FINRA alleged Network 1 violated Rules 2110, which refers to Standards of Commercial Honor and Principles of Trade, and Rule 2111, which refers to suitability. More specifically, the regulator alleged that Network 1’s registered representatives accepted and held customer orders but did not execute those orders. Instead, Network 1 traded for its own marketing-making account at a price that would have satisfied each customer’s limit order. Network 1 was censured and fined $10,000 for the violations, but did not admit to or deny the findings.

In 2007, the firm submitted an Acceptance, Waiver and Consent (AWC) letter responding to allegations that it transmitted required order and execution reports that contained incomplete or improperly formatted data. This resulted in the reporting system being unable to properly process the reports. Network 1 was fined $10,000 for the violation and required to revise its Written Supervisory Procedures (WSPS) regarding the order system. FINRA also found Network 1’s supervisory system lacked the functionality to ensure compliance with applicable rules, laws and regulations regarding reporting procedures.

Network 1 submitted another AWC letter in 2007 for the purpose of proposing a settlement of alleged rule violations. Between April 2003 and September 2004, a registered representative with Network 1 solicited a client, who was a controlling shareholder of a company, to sell shares of that company to Network 1 in amounts that exceeded the limits that a controlling shareholder could sell in public transactions. The firm purchased these shares with the intention to distribute them through its market making activities and then resell them in public transactions. FINRA alleged this was a violation of Rule 2110, which refers to the sale of unregistered securities and further alleged that Network 1 failed to have WSPS in place regarding the sale of unregistered securities designed to identify and address these violations.

As a result, Network 1 was censured and fined $100,000. It consented to these sanctions but did not admit or deny FINRA’s findings. The firm was further ordered to retain an independent consultant to conduct a comprehensive review of the firm’s policies as they pertain to market making and retail activity.

According to FINRA BrokerCheck, brokers associated with Network 1 have regulatory disclosures and customer disputes of their own, including:

•Robert Ciaccio, a Network 1 registered representative who has worked at 6 broker-dealers, 4 of which were expelled by FINRA. He has 4 customer disputes and 2 final regulatory events listed on his BrokerCheck report.

•Mark Miranda, a Network 1 registered representative who has worked at 8 broker-dealers in 18 years, 6 of which were expelled by FINRA. He has 2 customer disputes listed on his BrokerCheck report, one of which is still pending.

•Jeffrey Offen, a Network 1 registered representative who has worked at 14 broker-dealers since 1997, 7 of which were expelled by FINRA. He has 2 customer disputes on his BrokerCheck report.

•Patrick Teutonico, a Network 1 registered representative who has worked at a broker-dealer that was expelled by FINRA. He has 4 customer disputes and a final regulatory event listed n his BrokerCheck report.

If you or someone you know suffered losses as a result of broker abuse or misconduct at Network 1 Financial Securities, Inc., please call Cold Spring Advisory at (212) 566-6060 and we will help you to recover your losses.