Initiated By
FINRA
Allegations
FINRA RULE 2010, NASD RULES 2110, 2310, 2330(A), 3040, AND INTERPRETATIVE MATERIAL-2310-2: TINTLE PARTICIPATED IN A PRIVATE SECURITIES TRANSACTION OUTSIDE OF HIS ASSOCIATION WITH HIS MEMBER FIRM, WITHOUT PROVIDING THE FIRM PRIOR WRITTEN NOTICE OF THE PROPOSED TRANSACTION, HIS PROPOSED ROLE IN IT, OR THE SELLING COMPENSATION HE MAY RECEIVE FROM THE TRANSACTION. TINTLE PROPOSED TO THE FIRM THAT THE FIRM APPROVE A LIMITED PARTNERSHIP THAT WAS FORMED TO INVEST SUBSTANTIALLY ALL OF ITS ASSETS IN A MASTER FUND, FOR SALE THROUGH THE FIRM. THE OFFERING MATERIALS FOR THE ENTITY STATED THAT AN INVESTMENT IN THE ENTITY WAS SPECULATIVE, ILLIQUID, AND INVOLVED A HIGH DEGREE OF RISK, AND INVESTORS IN THE ENTITY WERE REQUIRED TO BE ACCREDITED. THE ENTITY WAS NEVER APPROVED BY THE FIRM FOR SALE THROUGH THE FIRM. TINTLE SUBMITTED THE FIRM'S ANNUAL COMPLIANCE QUESTIONNAIRE AND FALSELY REPRESENTED THAT HE HAD NOT PARTICIPATED IN PRIVATE SECURITIES TRANSACTIONS AWAY FROM THE FIRM WITHOUT PRIOR APPROVAL FROM THE FIRM. TINTLE RECOMMENDED AN INVESTMENT IN THE ENTITY TO A CUSTOMER OF HIS AT THE FIRM. TINTLE PARTICIPATED IN THE SALE OF THE ENTITY'S SECURITIES TO THE CUSTOMER, AND AT TINTLE'S DIRECTION, $1 MILLION WAS WIRED OUT OF THE CUSTOMER'S INDIVIDUAL RETIREMENT ACCOUNT (IRA) ACCOUNT AT THE FIRM TO A THIRD-PARTY ACCOUNT IN THE NAME OF THE ENTITY. TINTLE RECOMMENDED THAT A CUSTOMER INVEST IN THE ENTITY WITHOUT REASONABLE GROUNDS TO BELIEVE THAT THE RECOMMENDATION WAS SUITABLE, AS ITS SPECULATIVE AND ILLIQUID NATURE WAS INCONSISTENT WITH THE CUSTOMER'S OTHER SECURITY HOLDINGS, FINANCIAL SITUATION, AND NEEDS. THE CUSTOMER INVESTED $1 MILLION IN THE ENTITY THAT CONSTITUTED OF MORE THAN 70 PERCENT OF HER LIQUID NET WORTH, RESULTING IN AN UNSUITABLE CONCENTRATION OF HER LIQUID ASSETS. THE CUSTOMER'S UNSUITABLE CONCENTRATED POSITION IN THE ENTITY EXPOSED HER TO A RISK OF LOSS THAT EXCEEDED HER RISK TOLERANCE AND INVESTMENT OBJECTIVES. THE CUSTOMER SUFFERED A LOSS OF APPROXIMATELY $153,396 ON HER INVESTMENT IN THE ENTITY. AT VARIOUS TIMES, WHILE WITH SEPARATE MEMBER FIRMS, TINTLE MISUSED AND CONVERTED CUSTOMERS' FUNDS BY INDUCING THE CUSTOMERS TO WITHDRAW FUNDS FROM THEIR BROKERAGE ACCOUNTS AND WIRE THE FUNDS TO THIRD-PARTY BANK ACCOUNTS AS DIRECTED BY HIM. THE FUNDS WERE NOT APPLIED TO THE PURCHASE OF THE SECURITIES, A NON-TRADED REIT AND A MUTUAL FUND, AS INTENDED BY THE CUSTOMERS, BUT WERE RETAINED BY THE TRANSFEREES. THE CUSTOMERS' ALLEGED INVESTMENTS WERE NOT REFLECTED IN THEIR ACCOUNTS' STATEMENTS WITH THESE FIRMS. FOR ONE OF THESE CUSTOMERS, WHEN NO FUNDS WERE RETURNED TO HER ACCOUNT FROM EITHER THE BANK ACCOUNT OF THE THIRD-PARTY ENTITY OR THE NON-TRADED REAL ESTATE INVESTMENT TRUST (REIT), SHE COMPLAINED TO TINTLE'S ASSOCIATED MEMBER FIRM, AND THE FIRM REIMBURSED HER THE $45,300 THAT HAD BEEN WIRED OUT OF HER ACCOUNT. AT TINTLE'S DIRECTION, FOR ANOTHER CUSTOMER, FUNDS, TOTALING $27,500, WERE WIRED OUT OF HIS ACCOUNT AT ANOTHER OF TINTLE'S ASSOCIATED MEMBER FIRM TO A BANK ACCOUNT FOR A THIRD PARTY FOR ALLEGED INVESTMENTS WITH THE FIRM. TINTLE NEVER GAVE AN EXPLANATION TO THE CUSTOMER WHY THE ALLEGED INVESTMENTS WERE NOT REFLECTED ON HIS ACCOUNT STATEMENTS. AFTER TINTLE WAS TERMINATED FROM THE FIRM, THE CUSTOMER QUESTIONED THE FIRM ABOUT THE FUNDS THAT HAD BEEN WIRED FROM HIS ACCOUNT AND ULTIMATELY LEARNED THAT THE FUNDS HAD BEEN RETAINED BY A THIRD PARTY AND NOT INVESTED IN THE FIRM'S MUTUAL FUND AS TINTLE HAD LED HIM TO BELIEVE.
Resolution
Decision & Order of Offer of Settlement
Bar
Bar (Permanent)
Registration Capacities Affected
All Capacities
Duration
Indefinite
Start Date
3/4/2014
Regulator Statement
WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, TINTLE CONSENTED TO THE DESCRIBED SANCTION AND TO THE ENTRY OF FINDINGS THAT HE PARTICIPATED IN A PRIVATE SECURITIES TRANSACTION OUTSIDE THE SCOPE OF HIS ASSOCIATION WITH HIS MEMBER FIRM WITHOUT PROVIDING THE FIRM PRIOR WRITTEN NOTICE OF THE PROPOSED TRANSACTION, HIS PROPOSED ROLE IN IT, OR THE SELLING COMPENSATION HE MAY RECEIVE FROM IT. ON TINTLE'S FIRM'S ANNUAL COMPLIANCE QUESTIONNAIRE, HE FALSELY REPRESENTED THAT HE HAD NOT PARTICIPATED IN PRIVATE SECURITIES TRANSACTIONS AWAY FROM HIS FIRM WITHOUT PRIOR APPROVAL FROM THE FIRM. THE FINDINGS STATED THAT TINTLE RECOMMENDED THAT A CUSTOMER INVEST IN A LIMITED PARTNERSHIP WITHOUT REASONABLE GROUNDS TO BELIEVE THAT THE RECOMMENDATION WAS SUITABLE AS ITS SPECULATIVE AND ILLIQUID NATURE WAS INCONSISTENT WITH THE CUSTOMER'S OTHER SECURITY HOLDINGS, FINANCIAL SITUATION, AND NEEDS. THE CUSTOMER'S UNSUITABLE CONCENTRATED POSITION IN THE INVESTMENT EXPOSED HER TO A RISK OF LOSS THAT EXCEEDED HER RISK TOLERANCE AND INVESTMENT OBJECTIVES. THE FINDINGS ALSO STATED THAT AT A DIFFERENT MEMBER FIRM, TINTLE MISAPPLIED CUSTOMER FUNDS BY INDUCING CUSTOMERS TO WITHDRAW FUNDS FROM THEIR BROKERAGE ACCOUNTS AND WIRE THE FUNDS TO THIRD PARTIES AS DIRECTED BY TINTLE. THE FUNDS WERE NOT APPLIED TO THE PURCHASE OF SECURITIES AS INTENDED BY THE CUSTOMERS BUT WERE RETAINED BY THE TRANSFEREES. ONE OF THE CUSTOMERS COMPLAINED TO TINTLE'S FIRM AND THE FIRM REIMBURSED HER THE $45,300 THAT HAD BEEN WIRED OUT OF HER ACCOUNT. ANOTHER CUSTOMER REPEATEDLY ASKED TINTLE WHY THE ALLEGED INVESTMENTS WERE NOT REFLECTED ON HIS FIRM ACCOUNT STATEMENTS, TO WHICH TINTLE NEVER GAVE HIM AN EXPLANATION. AFTER TINTLE WAS TERMINATED FROM HIS FIRM, THE CUSTOMER LEARNED FROM THE FIRM THAT THE FUNDS HAD NOT BEEN INVESTED IN A FIRM FUND AS TINTLE HAD LED HIM TO BELIEVE.
