FINRA

Respondent Sheklow 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

5/23/2016

Pursuant to Article VI, Section 3 of FINRA By-Laws, and FINRA Rule 9554, Respondent Sheklow is suspended on May 23, 2016 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.

Breach of fiduciary duty and suitability.

$30,236.00

excessive trading; violations of the Securities Exchange Act of 1934 and the Martin Act; unauthorized trading, negligence, unsuitability, failure to adhere to industry standards of conduct; and breach of contract.

$151,373.17

The Award has not been paid.

MR SHEKLOW DENIES ALL ALLEGATIONS AND PLANS TO VIGOURISLY DEFEND AGAINST THIS CASE

NEGLIGENCE AND GROSS NEGLIGENCE, BREACH OF CONTRACT, BREACH OF FIDUCIARY DUTY

$26,000.00

ALASKA

RESPONDENTS ENGAGED IN DECEPTIVE AND MISLEADING SALES TACTICS WITH AN ELDERLY INVESTOR. RESPONDENTS DIRECTED JUNIOR AGENTS TO COLD CALL AN ELDERLY INVESTOR AND OTHER POTENTIAL CLIENTS AND TO MAKE DECEPTIVE AND MISLEADING REPRESENTATIONS REGARDING CERTAIN BONDS, PITCHING THEM AS SAFE INVESTMENTS AND PROMISING HIGH RATES OF RETURN, WHEN IN REALITY THE BONDS WERE JUNK BONDS RATED AS ONE STEP ABOVE DEFAULT STATUS BY BOND RATING AGENCIES. RESPONDENTS ALSO SENT ADDITIONAL OFFERS TO THE ELDERLY INVESTOR TO PURCHASE OTHER JUNK BONDS WITHOUT ANY CONSIDERATION FOR THE INVESTOR'S OBJECTIVES OR RISK TOLERANCE.

Order

Cease and Desist

Civil and Administrative Penalty(ies)/Fine(s)

$150,000.00

FINRA

SHEKLOW WAS NAMED A RESPONDENT IN A FINRA COMPLAINT ALLEGING THAT HE, WITH THE OTHER RESPONDENTS, FRAUDULENTLY SOLD A TOTAL OF NEARLY $3 MILLION WORTH OF SENIOR SECURED ZERO COUPON NOTES ISSUED BY AN ENTITY IN A PRIVATE PLACEMENT OFFERING TO CUSTOMERS. THE COMPLAINT ALLEGES THAT SHEKLOW AND THE OTHERS MISREPRESENTED MATERIAL FACTS ABOUT THE OFFERING, WHICH PROMISED TO PAY AN ASTRONOMICAL RETURN OF 100 PERCENT IN ONE YEAR BY PURPORTEDLY EXTRACTING PRECIOUS METALS FROM MATERIALS LEFT OVER FROM MINING OPERATIONS (KNOWN AS ORE CONCENTRATE). THE INVESTORS LOST ALL OF THE MONEY THAT THEY INVESTED IN THE NOTES, WITH THE EXCEPTION OF THREE INVESTORS WHO WERE REPAID IN A PONZI-LIKE MANNER WITH FUNDS FROM NEW INVESTORS. THE COMPLAINT ALSO ALLEGES THAT SHEKLOW AND THE OTHERS RECKLESSLY FAILED TO CONDUCT A REASONABLE INVESTIGATION OF THE VIABILITY AND LEGITIMACY OF THE ENTITY IN THE FACE OF NUMEROUS RED FLAGS THAT IT WAS A FRAUD. IN CONNECTION WITH THEIR SALES OF THE NOTES, SHEKLOW AND THE OTHERS RECKLESSLY MISREPRESENTED THAT THE NOTES WERE COLLATERALIZED BY CERTAIN BARRELS OF ORE CONCENTRATE AND THE ORE CONCENTRATE THAT SUPPOSEDLY SERVED AS THE COLLATERAL WAS OF SUFFICIENT VALUE TO SECURE AN INVESTMENT IN THE NOTES. IN FACT, THERE WAS NO COLLATERAL FOR THE NOTES, BECAUSE THE ENTITY DID NOT OWN ANY ORE CONCENTRATE, DESPITE A MISREPRESENTATION IN THE NOTES THAT OWNERSHIP OF ORE CONCENTRATE HAD BEEN TRANSFERRED TO INVESTORS. FURTHER, THE ORE CONCENTRATE THAT WAS SUPPOSED TO SERVE AS THE COLLATERAL WAS NEARLY WORTHLESS. SHEKLOW AND THE OTHERS, HAVING FAILED TO CONFIRM THAT THE COLLATERAL EXISTED AND THAT THE SUPPOSED COLLATERAL HAD ANY VALUE, RECKLESSLY MISREPRESENTED TO PROSPECTIVE PURCHASERS THAT THEIR INVESTMENTS WOULD BE ADEQUATELY SECURED BY COLLATERAL. SHEKLOW AND THE OTHERS RECKLESSLY MISREPRESENTED MATERIAL FACTS REGARDING THE NOTES TO THEIR CUSTOMERS, IN WILLFUL VIOLATION OF SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 THEREUNDER. ALTERNATIVELY, SHEKLOW AND THE OTHERS NEGLIGENTLY MISREPRESENTED MATERIAL FACTS, IN CONTRAVENTION OF SECTIONS 17(A)(2) OF THE SECURITIES ACT OF 1933. THE COMPLAINT FURTHER ALLEGES THAT SHEKLOW AND THE OTHERS FAILED TO OBTAIN BASIC INFORMATION ABOUT THE ENTITY THAT WAS NECESSARY TO THE DUE DILIGENCE PROCESS IN ORDER TO UNDERSTAND AN INVESTMENT IN THE COMPANY. WITHOUT SUCH INFORMATION, THEY LACKED A REASONABLE BASIS TO RECOMMEND THE NOTES TO INVESTORS. SHEKLOW AND THE OTHERS DID NOT SATISFY THEIR REASONABLE BASIS SUITABILITY OBLIGATIONS WITH RESPECT TO THE NOTES. NONETHELESS, THEY RECOMMENDED THE SECURITIES TO THEIR CUSTOMERS. SHEKLOW AND THE OTHERS EACH LACKED A REASONABLE BASIS TO RECOMMEND THE NOTES TO THEIR CUSTOMERS IN LIGHT OF THEIR OBTAINING ONLY LIMITED INFORMATION ABOUT THE NOTES, THEIR LACK OF INVESTIGATION INTO THE ENTITY AND THE MULTIPLE RED FLAGS SURROUNDING THE OFFERING. IN ADDITION TO THE FAILURES BY SHEKLOW AND THE OTHERS TO INVESTIGATE AND UNDERSTAND THE NOTES AND IN LIGHT OF THE RED FLAGS SURROUNDING THE NOTES, THE NOTES WERE SIMPLY NOT A SUITABLE INVESTMENT FOR ANY INVESTOR.

Decision & Order of Offer of Settlement

Bar (Permanent)

All Capacities

7/1/2015

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, SHEKLOW CONSENTED TO THE SANCTION AND TO THE ENTRY OF FINDINGS THAT HE RECKLESSLY MISREPRESENTED MATERIAL FACTS REGARDING NOTES ISSUED BY A COMPANY IN A PRIVATE PLACEMENT OFFERING TO HIS CUSTOMERS, IN WILLFUL VIOLATION OF SECTION 10(B) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 10B-5 THEREUNDER. THE FINDINGS STATED THAT IN CONNECTION WITH HIS SALES OF THE NOTES, SHEKLOW RECKLESSLY MISREPRESENTED THAT THE NOTES WERE COLLATERALIZED AND THAT THE COLLATERAL WAS OF SUFFICIENT VALUE TO SECURE AN INVESTMENT IN THE NOTES, WHEN IN FACT, THERE WAS NO COLLATERAL FOR THE NOTES. SHEKLOW, HAVING FAILED TO CONFIRM THAT THE COLLATERAL EXISTED AND THAT THE SUPPOSED COLLATERAL HAD ANY VALUE, RECKLESSLY MISREPRESENTED TO PROSPECTIVE PURCHASERS THAT THEIR INVESTMENTS WOULD BE ADEQUATELY SECURED BY COLLATERAL. THE FINDINGS ALSO STATED THAT SHEKLOW FAILED TO OBTAIN BASIC INFORMATION ABOUT THE COMPANY THAT WAS NECESSARY TO THE DUE DILIGENCE PROCESS IN ORDER TO UNDERSTAND AN INVESTMENT IN THE COMPANY. WITHOUT SUCH INFORMATION, SHEKLOW LACKED A REASONABLE BASIS TO RECOMMEND THE NOTES TO INVESTORS. THE INVESTORS LOST ALL OF THE MONEY THAT THEY INVESTED IN THE NOTES, WITH THE EXCEPTION OF INVESTORS WHO WERE REPAID WITH FUNDS FROM NEW INVESTORS.

MR. SHEKLOW DENIES THE CHARGES AND INTENDS TO VIGOROUSLY DEFEND THE MATTER

New Hampshire

Respondent Sheklow solicited NH investor by phone to invest in low grade corporate bonds saying that they were good investments. Bonds were not suitable, were unregistered, and there was fraud in the sale.

Order

Cease and Desist

Civil and Administrative Penalty(ies)/Fine(s)

$100,000.00

Revocation

costs

SUITABILITY, BREACH OF FUDUCIARY DUTY, UNAUTHORIZED TRADING, FRAUS AND CHURNING

$100,000.00

$20,000.00

CLAIM BY CLIENT WAS FRIVOLOUS AND I EMPHTICALLY DENY THAT ANY IMPROPRIETY OCCURED WITH RESPECT TO HIS ACCOUNT. I WAS NOT NAMED IN THE ARBITRATION AND MY PRIOR FIRM DECIDED TO SETTLE TO AVOID THE ADDITIONAL LEGAL COST