FINRA

RESPONDENT BHASIN FAILED TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

LETTER

Suspension

ANY CAPACITY

N/A

3/23/2015

PURSUANT TO ARTICLE VI, SECTION 3 OF FINRA BY-LAWS, AND FINRA RULE 9554, RESPONDENT BHASIN IS SUSPENDED ON MARCH 23, 2015 FOR FAILURE TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

FINRA

RESPONDENT BHASIN FAILED TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

LETTER

Suspension

ANY CAPACITY

N/A

9/3/2014

PURSUANT TO ARTICLE VI, SECTION 3 OF FINRA BY-LAWS, AND FINRA RULE 9554, RESPONDENT BHASIN IS SUSPENDED ON SEPTEMBER 3, 2014 FOR FAILURE TO COMPLY WITH AN ARBITRATION AWARD OR SETTLEMENT AGREEMENT OR TO SATISFACTORILY RESPOND TO A FINRA REQUEST TO PROVIDE INFORMATION CONCERNING THE STATUS OF COMPLIANCE.

FINRA

FINRA BY-LAWS ARTICLE V, SECTION 2 AND SECTION 3, FINRA RULES 1122, 2010, 4530(D), NASD RULES 2110, 2212(A)(2), (A)(3) AND (D), 3010(A) AND (B), 3070(C): BHASIN'S MEMBER FIRM, ACTING THROUGH HIM AND AT HIS DIRECTIVE, DERIVED MOST OF ITS REVENUE FROM ACTIVELY AND AGGRESSIVELY TRADING STOCKS IN THE COMMISSION-BASED ACCOUNTS OF ITS RETAIL CUSTOMERS. BHASIN PRIORITIZED HIS FIRM'S PROFITS OVER THE DUTIES OWED TO ITS CUSTOMERS AND CHOSE NOT TO ESTABLISH A SUPERVISORY SYSTEM TAILORED TO THE FIRM'S BUSINESS. INSTEAD, BHASIN FOSTERED A CULTURE OF NON-COMPLIANCE THAT RESULTED IN WIDESPREAD SALES PRACTICE VIOLATIONS, NUMEROUS CUSTOMER COMPLAINTS, RELATED REPORTING VIOLATIONS AND COLD-CALLING ABUSES. BHASIN FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS AND NASD/FINRA RULES, AND FAILED TO MONITOR FOR, DETECT AND INVESTIGATE RED FLAGS SUGGESTIVE OF MISCONDUCT BY THE FIRM'S BROKERS. BHASIN FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM, INCLUDING WSPS TO SUPERVISE ITS BUSINESS, INCLUDING ITS ACTIVE AND AGGRESSIVE INVESTMENT STRATEGY, AND SUPERVISE ITS REGISTERED AND ASSOCIATED PERSONS, THAT WERE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS AND NASD/FINRA RULES. THE WSPS WERE BOTH DEFICIENT AND INADEQUATELY IMPLEMENTED. BHASIN FAILED TO ENSURE THAT THE SYSTEM TO MONITOR TRADES FOR EXCESSIVE TRADING AND CHURNING, AND SUITABILITY WAS ADEQUATELY IMPLEMENTED OR ENFORCED. THE FIRM FAILED TO PUT ITS BROKERS ON HEIGHTENED SUPERVISION. AS A RESULT OF THE GROSSLY INADEQUATE SUPERVISORY SYSTEM BHASIN ESTABLISHED, MANY FIRM CUSTOMERS SUFFERED SIGNIFICANT LOSSES. THE FIRM, ACTING THOUGH ITS BROKERS, ENGAGED IN UNAUTHORIZED TRADING IN CUSTOMER ACCOUNTS, CHURNED AND EXCESSIVELY TRADED CUSTOMER ACCOUNTS, AND RECOMMENDED QUALITATIVELY UNSUITABLE INVESTMENTS TO CUSTOMERS WITHOUT HAVING REASONABLE GROUNDS TO BELIEVE THAT THE RECOMMENDATIONS WERE SUITABLE FOR THE CUSTOMERS BASED ON THEIR DISCLOSED SECURITY HOLDINGS AND FINANCIAL SITUATION AND NEEDS. BHASIN FAILED TO REPORT AND FAILED TO TIMELY REPORT CUSTOMER COMPLAINTS TO FINRA. BHASIN WILLFULLY FAILED TO DISCLOSE MATERIAL FACTS OR INFORMATION ON HIS FORM U4, AND WILLFULLY FILED FALSE AND MISLEADING AMENDMENTS TO HIS FORM U4 WHEREIN HE FAILED TO DISCLOSE ARBITRATIONS. BHASIN FAILED TO FILE AND TIMELY FILE FORM U4 AMENDMENTS, FAILED TO TIMELY FILE A FORM U5 AMENDMENT, AND UNTIMELY FILED A FORM U5 AMENDMENT WITH FALSE INFORMATION. THE FIRM, THROUGH BHASIN, FAILED TO INSTITUTE ADEQUATE PROCEDURES TO PREVENT TELEPHONE SOLICITATIONS TO PERSONS WHOSE NUMBERS WERE ON THE FIRM-SPECIFIC AND NATIONAL DO-NOT-CALL LISTS. FIRM BROKERS OR REPRESENTATIVES MADE TELEPHONE SOLICITATIONS TO PERSONS WHOSE NUMBERS WERE ALREADY ON THE FIRM'S DO-NOT-CALL LIST, AS EVIDENCED BY THE FACT THAT THOSE NUMBERS WERE ADDED TO THE LIST AGAIN AFTER THEIR FIRST APPEARANCE ON THE LIST.

Decision & Order of Offer of Settlement

Bar (Permanent)

All Capacities

9/26/2014

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, BHASIN CONSENTED TO THE SANCTION AND TO THE ENTRY OF FINDINGS THAT HIS MEMBER FIRM, ACTING THROUGH HIM AND AT HIS DIRECTIVE, DERIVED MOST OF ITS REVENUE FROM ACTIVELY AND AGGRESSIVELY TRADING STOCKS IN THE COMMISSION-BASED ACCOUNTS OF ITS RETAIL CUSTOMERS. THE FINDINGS STATED THAT BHASIN PRIORITIZED HIS FIRM'S PROFITS OVER THE DUTIES OWED TO ITS CUSTOMERS AND CHOSE NOT TO ESTABLISH A SUPERVISORY SYSTEM TAILORED TO THE FIRM'S BUSINESS. INSTEAD, BHASIN FOSTERED A CULTURE OF NON-COMPLIANCE THAT RESULTED IN WIDESPREAD SALES PRACTICE VIOLATIONS, NUMEROUS CUSTOMER COMPLAINTS, RELATED REPORTING VIOLATIONS AND COLD-CALLING ABUSES. BHASIN FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM THAT WAS REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS AND NASD/FINRA RULES, AND FAILED TO MONITOR FOR, DETECT AND INVESTIGATE RED FLAGS SUGGESTIVE OF MISCONDUCT BY THE FIRM'S BROKERS. BHASIN FAILED TO ESTABLISH, MAINTAIN AND ENFORCE A SYSTEM, INCLUDING WSPS TO SUPERVISE ITS BUSINESS, INCLUDING ITS ACTIVE AND AGGRESSIVE INVESTMENT STRATEGY, AND SUPERVISE ITS REGISTERED AND ASSOCIATED PERSONS, THAT WERE REASONABLY DESIGNED TO ACHIEVE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS AND NASD/FINRA RULES. THE WSPS WERE BOTH DEFICIENT AND INADEQUATELY IMPLEMENTED. BHASIN FAILED TO ENSURE THAT THE SYSTEM TO MONITOR TRADES FOR EXCESSIVE TRADING AND CHURNING, AND SUITABILITY WAS ADEQUATELY IMPLEMENTED OR ENFORCED. THE FINDINGS ALSO STATED THAT THE FIRM FAILED TO PUT ITS BROKERS ON HEIGHTENED SUPERVISION. AS A RESULT OF THE GROSSLY INADEQUATE SUPERVISORY SYSTEM BHASIN ESTABLISHED, MANY FIRM CUSTOMERS SUFFERED SIGNIFICANT LOSSES. THE FIRM, ACTING THOUGH ITS BROKERS, ENGAGED IN UNAUTHORIZED TRADING IN CUSTOMER ACCOUNTS, CHURNED AND EXCESSIVELY TRADED CUSTOMER ACCOUNTS, AND RECOMMENDED QUALITATIVELY UNSUITABLE INVESTMENTS TO CUSTOMERS WITHOUT HAVING REASONABLE GROUNDS TO BELIEVE THAT THE RECOMMENDATIONS WERE SUITABLE FOR THE CUSTOMERS BASED ON THEIR DISCLOSED SECURITY HOLDINGS AND FINANCIAL SITUATION AND NEEDS. THE FINDINGS ALSO INCLUDED THAT BHASIN FAILED TO REPORT AND FAILED TO TIMELY REPORT CUSTOMER COMPLAINTS TO FINRA. BHASIN WILLFULLY FAILED TO DISCLOSE MATERIAL FACTS OR INFORMATION ON HIS FORM U4, AND WILLFULLY FILED FALSE AND MISLEADING AMENDMENTS TO HIS FORM U4 WHEREIN HE FAILED TO DISCLOSE ARBITRATIONS. BHASIN FAILED TO FILE AND TIMELY FILE FORM U4 AMENDMENTS, FAILED TO TIMELY FILE A FORM U5 AMENDMENT, AND UNTIMELY FILED A FORM U5 AMENDMENT WITH FALSE INFORMATION. FINRA FOUND THAT THE FIRM, THROUGH BHASIN, FAILED TO INSTITUTE ADEQUATE PROCEDURES TO PREVENT TELEPHONE SOLICITATIONS TO PERSONS WHOSE NUMBERS WERE ON THE FIRM-SPECIFIC AND NATIONAL DO-NOT-CALL LISTS. FIRM BROKERS OR REPRESENTATIVES MADE TELEPHONE SOLICITATIONS TO PERSONS WHOSE NUMBERS WERE ALREADY ON THE FIRM'S DO-NOT-CALL LIST, AS EVIDENCED BY THE FACT THAT THOSE NUMBERS WERE ADDED TO THE LIST AGAIN AFTER THEIR FIRST APPEARANCE ON THE LIST.

negligence, suitability, negligent misrepresentation and omission, intentional misrepresentation and omissions, fraud, violation of California securities laws, control person liability, breach of fiduciary duty, failure to supervise, breach of FINRA Rules, breach of contract, and loss of investment opportunity.

$131,763.00

The Award has not been paid.

FRAUD, COMMON LAW BREACH OF CONTRACT, NEGLIGENCE AND RECKLESSNESS, AND VIOLATIONS OF THE FLORIDA SECURITIES ACT § 517.301. THE CAUSES OF ACTION RELATE TO THE ALLEGED OVERCONCENTRATION, CHURNING, UNAUTHORIZED AND UNSUITABLE TRANSACTIONS OF SPECULATIVE STOCKS ON MARGIN IN CLAIMANT'S ACCOUNT,

$200,000.00

The Award has not been paid.

Violation of Investment Advisers Act of 1940, 15 U.S.C. 80b-1 et seq.; breach of fiduciary duty; negligence; breach of contract; and respondeat superior. In the Amended Statement of Claim, Claimants added the following causes of action: violations of the Florida Uniform Fraudulent Transfer Act, Chapter 726, 726.105; fraud; negligent misrepresentation; vicarious liability by piercing the corporate veil; unauthorized transactions NASD Rule 2110 and FINRA Rule 2010; churning; fraudulent misrepresentations (willful violations of Section 10(b) of the Exchange Act and Rule 10b-5 and violations of FINRA Rules 2020 and 2010); violations of NASD Rule 2310 and FINRA Rule 2010; violations of NASD Rule 2310, IM-2310-2 and FINRA Rule 2010; forgery/falsification of a document; failure to report and timely report events under NASD Rule 3070; violation of FINRA Margin Requirements; and Form U4 and Form U5 violations.

$2,790,152.93

In the First Amended Statement of Claim, Claimants requested: Compensatory, consequential, and/or monetary damages in an amount to be determined by the Panel;