FINRA

NASD RULES 2110, 2310, 3030: XAGORARIS MADE UNSUITABLE RECOMMENDATIONS TO A CUSTOMER OF HIS MEMBER FIRM TO PURCHASE VARIABLE UNIVERSAL LIFE (VUL) POLICIES WITHOUT OFFERING ANY ALTERNATIVE INVESTMENT RECOMMENDATIONS EVEN THOUGH THE CUSTOMER'S INVESTMENT OBJECTIVES WERE INCOME, AND SHE NEITHER WANTED NOR NEEDED LIFE INSURANCE; XAGORARIS RECEIVED COMMISSIONS TOTALING $3,736.02 FROM THE CUSTOMER'S INVESTMENT IN THE VUL POLICIES. XAGORARIS RECOMMENDED THAT THE CUSTOMER REFINANCE HER PRIMARY RESIDENCE, THROUGH HIS MORTGAGE BROKERAGE BUSINESS, IN AN AMOUNT GREATER THAN THE EXISTING LOAN, AND TO UTILIZE A PORTION OF THE EXCESS CASH TO INVEST IN REAL ESTATE AND/OR SECURITIES AND, BY ENTERING INTO A BUSINESS ARRANGEMENT WITH THE CUSTOMER THAT ENTITLED HIM TO A PORTION OF ANY PROFITS GENERATED BY THE PROPERTY PURCHASED WITH THE CUSTOMER'S FUNDS, XAGORARIS ACCEPTED COMPENSATION AND/OR WAS EMPLOYED OUTSIDE THE SCOPE OF HIS EMPLOYMENT WITH HIS MEMBER FIRM WITHOUT PROVIDING THE FIRM WITH PROMPT WRITTEN NOTICE. XAGORARIS RECOMMENDED THE PURCHASE OF A VUL POLICY TO ANOTHER CUSTOMER WITHOUT DISCUSSING OTHER INVESTMENT ALTERNATIVES EVEN THOUGH THE CUSTOMER DID NOT WANT OR NEED LIFE INSURANCE. XAGORARIS RECOMMENDED THAT THE CUSTOMER REFINANCE HER HOME MORTGAGES INTO A SINGLE "PICK A PAYMENT" MORTGAGE THROUGH HIS MORTGAGE BROKERAGE BUSINESS, WHICH RESULTED IN MATERIAL FINANCIAL HARM TO THE CUSTOMER BECAUSE SHE LACKED SUFFICIENT CURRENT INCOME TO MAKE ANY OF THE PAYMENTS THAT WOULD PREVENT NEGATIVE AMORTIZATION. THE CUSTOMER FRONT-LOADED PAYMENT OF THE VUL FROM FUNDS OBTAINED IN THE REFINANCE BECAUSE SHE COULD NOT AFFORD THE MONTHLY PREMIUM PAYMENTS FROM CURRENT INCOME; XAGORARIS RECEIVED APPROXIMATELY $1,278.90 IN COMMISSION FROM THE SALE OF THE VUL. THE FIRM RESCINDED THE VUL POLICY AND REPAID THE PREMIUMS TO THE CUSTOMER. THE CUSTOMER GAVE XAGORARIS APPROXIMATELY $60,000 TO PURCHASE MUTUAL FUNDS FROM HER HOME MORTGAGE REFINANCE WITHOUT XAGORARIS HAVING A REASONABLE BASIS FOR BELIEVING THE VUL AND MUTUAL FUND PURCHASES WERE SUITABLE IN LIGHT OF HER FINANCIAL CIRCUMSTANCES, NEEDS AND INVESTMENT OBJECTIVES. XAGORARIS COMPLETED AND SIGNED COMPLIANCE QUESTIONNAIRES HIS FIRM REQUIRED, AND FALSELY ANSWERED "YES" TO THE QUESTION THAT HE HAD NOT ACCEPTED FROM A CUSTOMER OR A FIRM REPRESENTATIVE, ANY CASH, A CHECK MADE PAYABLE TO HIMSELF, OR SHARED IN ANY PROFIT OR LOSS IN A CUSTOMER'S OR ANY OF HIS FIRM'S REPRESENTATIVE ACCOUNT.

Decision

Bar (Permanent)

All Capacities

Indefinite

8/1/2014

Monetary Penalty other than Fines

$7,510.69

Restitution

$14,000.00

IN LIGHT OF THE BAR, NO FINE WAS IMPOSED.

HEARING PANEL DECISION RENDERED MARCH 15, 2013 WHEREIN XAGORARIS IS BARRED FROM ASSOCIATING WITH ANY FINRA MEMBER FIRM IN ANY CAPACITY FOR MAKING UNSUITABLE RECOMMENDATIONS TO TWO CUSTOMERS, IN VIOLATION OF NASD RULES 2310 AND 2110. XAGORARIS IS ALSO BARRED FROM ASSOCIATING IN ANY CAPACITY WITH ANY FINRA MEMBER FIRM FOR ENGAGING IN AN OUTSIDE BUSINESS ACTIVITY WITHOUT PROVIDING PROMPT WRITTEN NOTICE TO HIS FIRM, AND SUBMITTING FALSE ANNUAL COMPLIANCE CERTIFICATIONS TO CONCEAL THIS ACTIVITY FROM HIS FIRM, IN VIOLATION OF NASD RULES 3030 AND 2110. XAGORARIS SHALL PAY COSTS IN THE AMOUNT OF $6,325, WHICH REPRESENTS THE COST OF THE HEARING TRANSCRIPT TOGETHER WITH A $750 ADMINISTRATIVE FEE. [THIS CASE IS ASSOCIATED WITH FINRA CASE #2008013376801] NAC DECISION RENDERED AUGUST 1, 2014. THE SANCTIONS WERE BASED ON FINDINGS THAT XAGORARIS MADE UNSUITABLE RECOMMENDATIONS TO CUSTOMERS TO PURCHASE VARIABLE UNIVERSAL LIFE (VUL) POLICIES BECAUSE THE CUSTOMERS DID NOT HAVE ANY DISCRETIONARY INCOME. THE FINDINGS STATED THAT XAGORARIS' RECOMMENDATION TO A CUSTOMER TO LIQUEFY EQUITY IN HER HOME TO MAKE PAYMENT ON A VUL POLICY AND TO INVEST IN A MUTUAL FUND WAS UNSUITABLE BECAUSE, RATHER THAN ADDRESSING HER NEED TO MANAGE HER DEBT, IT CAUSED HER DEBT BURDEN TO INCREASE. XAGORARIS HAD A CONFLICT OF INTEREST BECAUSE HE WAS THE LOAN OFFICER ON THE REFINANCING AND RECOMMENDED THE CUSTOMER USE THE FUNDS TO MAKE INVESTMENTS THAT PROVIDED HIM A COMMISSION. THE FINDINGS ALSO STATED THAT XAGORARIS FAILED TO PROVIDE WRITTEN NOTICE TO HIS FIRM THAT HE WAS ENGAGED IN A REAL ESTATE VENTURE WITH A CUSTOMER OUTSIDE THE SCOPE OF HIS RELATIONSHIP WITH THE FIRM. THE FINDINGS ALSO INCLUDED THAT XAGORARIS PROVIDED FALSE ANSWERS ON HIS MEMBER FIRM'S COMPLIANCE QUESTIONNAIRES WHEN HE DENIED HE HAD ACCEPTED A CHECK FROM ANY FIRM CUSTOMERS, ALTHOUGH HE HAD KNOWINGLY ACCEPTED A $70,000 CHECK FROM A CUSTOMER. XAGORARIS' FALSE ANSWERS DENIED THE FIRM THE OPPORTUNITY TO REVIEW THE TRANSACTION, WHICH INVOLVED SIGNIFICANT POTENTIAL CONFLICTS OF INTEREST AND MISCONDUCT. THE DECISION BECAME FINAL SEPTEMBER 3, 2014.

HEARING PANEL DECISION RENDERED MARCH 15, 2013 WHEREIN XAGORARIS IS BARRED FROM ASSOCIATING WITH ANY FINRA MEMBER FIRM IN ANY CAPACITY FOR MAKING UNSUITABLE RECOMMENDATIONS TO TWO CUSTOMERS, IN VIOLATION OF NASD RULES 2310 AND 2110. XAGORARIS IS ALSO BARRED FROM ASSOCIATING IN ANY CAPACITY WITH ANY FINRA MEMBER FIRM FOR ENGAGING IN AN OUTSIDE BUSINESS ACTIVITY WITHOUT PROVIDING PROMPT WRITTEN NOTICE TO HIS FIRM, AND SUBMITTING FALSE ANNUAL COMPLIANCE CERTIFICATIONS TO CONCEAL THIS ACTIVITY FROM HIS FIRM, IN VIOLATION OF NASD RULES 3030 AND 2110. XAGORARIS SHALL PAY COSTS IN THE AMOUNT OF $6,325, WHICH REPRESENTS THE COST OF THE HEARING TRANSCRIPT TOGETHER WITH A $750 ADMINISTRATIVE FEE. THE DECISION HAS BEEN APPEALED TO THE NAC AND THE SANCTION IS NOT IN EFFECT PENDING THE APPEAL. [THIS CASE IS ASSOCIATED WITH FINRA CASE #2008013376801]