FINRA

Respondent Kittlaus 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

All capacities

Indefinite

Continues until required payment is made or discharged.

7/10/2018

Pursuant to Article VI, Section 3 of FINRA By-Laws, and FINRA Rule 9554, Respondent Kittlaus is suspended on July 10, 2018 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 Kittlaus 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

All Capacities

Indefinite

Continues until required payment is made or discharged.

4/10/2018

Pursuant to Article VI, Section 3 of FINRA By-Laws, and FINRA Rule 9554, Respondent Kittlaus is suspended on April 10, 2018 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.

AN ARBITRATION WAS FILED BY [customer] CLAIMANT. Customer alleged that Kittlaus recommended that the Customer invest in unsuitable private placements. The allegations state that Kittlaus failed to conduct adequate due diligence review of the private placements and misrepresented the private placements to the customers.

$150,000.00

$76,000.00

Investment dates range from 11/2006 to 6/2008. Claimants allege products selected for investment were unsuitable in light of age, investment objectives and risk factors

$100,000.00

Kittlaus was named in a customer complaint that asserted the following causes of action: Violation of Standards of Reasonable Basis Suitability (NASD Rule 2310; FINRA Rule 2310(b)), and Just and Equitable Principles of Trade (FINRA Rule 2010); Fraud, Misleading Statements, Misleading Omissions of Material Information (NASD Rule 2210(d)(1)), and Just and Equitable Principles of Trade (FINRA Rule 2010); Breach of Fiduciary Duty; Negligent Misrepresentation; Negligence; Breach of Contract; Breach of the Covenant of Good Faith and Fair Dealing; Elder Abuse; and Aiding and Abetting Financial Elder Abuse.

CLAIMANT STATES PRODUCTS SELECTED FOR INVESTMENT WERE UNSUITABLE IN LIGHT OF AGE, INVESTMENT OBJECTIVES AND RISK TOLERANCE.

$700,000.00

FINRA

FINRA RULE 2010, NASD RULES 2210(D)(1)(A), 2210(D)(1)(B), 2210(D)(1)(D) - LOUIS KITTLAUS DISTRIBUTED TO CUSTOMERS A MISLEADING SALES BROCHURE ADVERTISING RENEWABLE SECURED DEBENTURES THAT FALSELY STATED THE DEBENTURES WERE SECURED BY LIFE INSURANCE POLICIES ALTHOUGH THE POLICIES ARE NOT COLLATERAL FOR THE DEBENTURES AND THE SECURED INTEREST THE DEBENTURES HAVE ARE SUBORDINATE TO OTHER CREDITORS OF THE ISSUER'S SUBSIDIARIES. THE BROCHURE OMITTED THESE MATERIAL FACTS AND THUS WAS MISLEADING. KITTLAUS DISTRIBUTED THE FALSE AND MISLEADING BROCHURE TO PROSPECTIVE CUSTOMERS WHICH CONTAINED EXAGGERATED AND UNWARRANTED CLAIMS ABOUT THE DEBENTURES, PREDICTED FUTURE PERFORMANCE, AND FAILED TO PROVIDE ANY INFORMATION REGARDING THE RISKS OF INVESTING IN THE DEBENTURES. KITTLAUS FAILED TO OBSERVE HIGH STANDARDS OF COMMERCIAL HONOR AND JUST AND EQUITABLE PRINCIPLES OF TRADE.

Decision

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

$25,000.00

Monetary Penalty other than Fines

$3,720.66

Requalification

Suspension

Any capacity

Two years

6/6/2016

6/6/2018

Extended Hearing Panel decision rendered September 15, 2015 wherein Kittlaus was assessed a deferred fine of $25,000, suspended from association with any FINRA member in any capacity for two years, ordered to requalify by examination before again becoming registered in any capacity in the securities industry and ordered to pay deferred costs in the amount of $3,720.66. The sanctions were based on findings that Kittlaus made false, exaggerated, unwarranted, and misleading statements in a communication he distributed to the public. The findings stated that Kittlaus wrote and distributed a letter received by a president of a FINRA member firm, and in it made exaggerated and unwarranted claims and improper predictions of future performance. The letter contained a pitch for alternative investments and invitation to attend a dinner meeting. Attached to the letter were two pages describing renewable secured debentures issued by a company. The company's debentures were a high-risk, illiquid, alternative investment. On its face, the letter was directed to a prospective customer to interest him in investing in the company's debentures Kittlaus was promoting. The letter was also not fair and balanced in that it did not disclose the risks and rewards of the touted investment in the company's debentures. The letter promised significant potential gain without disclosing any risks, including possible financial loss, and failed to provide the reader with any basis, much less a sound one, for evaluating the claims it made. The promised high rate of return and projection of profitability were not accompanied by any explanation of the assumptions underlying the forecasts. The letter's promises of increased income, elimination of the risk of daily fluctuation, and creation of a more predictable financial future with no mention of the risks inherent to balance these representations were exaggerated and misleading, implying an unrealistic certainty of positive outcomes. The letter mentioned no risks and predicted returns with specific percentages and dollar figures without any explanation of the historical basis for these claims or any proviso that past results are no guarantee of future performance. The allegation that Kittlaus distributed a misleading brochure advertising the debentures was dismissed. On October 9, 2015, Kittlaus appealed the Extended Hearing Panel decision to the National Adjudicatory Council (NAC) and the sanctions are not in effect pending the review. Kittlaus withdrew his appeal to the NAC and the Extended Hearing Panel decision became the final disciplinary decision by FINRA in this matter.

NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.

Acceptance, Waiver & Consent(AWC)

Monetary/Fine

$7,500.00

Censure

BROCHURE WAS AN EXPERIMENT TO A FEW POSSIBLE INVESTORS NOT MENT FOR BROAD DISTIBUTION.

COUSINS SECURITIES CORPORATION

Discharged

PRINTED & DISTRIBUTED A BROCHURE WITHOUT BD APPROVAL

TERMINATION FROM FIRM COUSINS RELEASED ME FROM THEIR EMPLOYMENT BECAUSE I DID NOT GET PERMISSION TO DISTRIBUTE A BROCHURE ON AN EXTREMELY LIMITED BASIS, AND BECAUSE I WOULD NOT SELL PRODUCTS THEY WANTED ME TO SELL - ESPECIALLY MUTUAL FUNDS.

CRIMINAL DAMAGE TO PROPERTY

FELONY

DISMISSED WITHOUT PREJUDICE

AN AUTOMOBILE IN MY NEIGHBORHOOD WAS DAMAGED. I WAS MISTAKENLY ACCUSED. AT TRIAL THE CASE WAS DISMISSED.