UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC Admin Release 34-88732; IA Release 5486, April 23, 2020: The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Stephen Douglas Pizzuti. On November 5, 2019, Pizzuti pled guilty to one count of concealment of assets in a bankruptcy case, in violation of Title 18, United States Code, Section 152(1), before the United States District Court for the Middle District of Florida, in United States v. Stephen Douglas Pizzuti, Case No. 6:19-cr-00204. On January 13, 2020, Pizzuti was sentenced to two years probation. The Court also ordered forfeiture and restitution, both in the amount of $28,002.40. In connection with that plea, Pizzuti admitted that on October 23, 2015, he and his wife filed a joint Chapter 7 bankruptcy petition that failed to identify as an asset Pizzuti's book of business from his time as a broker. On November 1, 2015, Pizzuti sold his book of business for $300,000 consisting of an immediate partial payment, with the balance due over time. On November 24, 2015, at a Section 341 creditor's meeting, Pizzuti, under oath, falsely represented that he had not transferred or sold any assets beyond what was disclosed in the bankruptcy petition. Over the course of a year, Pizzuti received over $28,000 from the buyer of the book of business, which Pizzuti concealed by receiving the funds in cash or in the form of wire transfers to his wife and son.

Order

Bar (Permanent)

broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or NRSRO

Indefinite

8/20/2020

Participating in any offering of a penny stock

Indefinite

8/20/2020

Penny Stock Bar

Alleged wrong doing and losses without any evidence to support the claims. See section 24.

$90,000.00

Addendum A - submitted via email to disclosurereviewdocuments@finra.org

Bankruptcy

Discharged

Proceedings in FINRA Arbitration Case #13-02320 against Stephen Douglas Pizzuti were stayed by Bankruptcy proceedings in United States Bankruptcy Court, Florida Middle - Orlando, Case #15-09016.

FINRA

FINRA RULE 2010, NASD RULES 2110, 3010: PIZZUTI DISSEMINATED SECURITIES-RELATED COMMUNICATIONS TO THE PUBLIC THAT CONTAINED MATERIAL OMISSIONS AND/OR MATERIALLY MISLEADING INFORMATION. PIZZUTI MADE THESE COMMUNICATIONS THROUGH WEBSITES HE CONTROLLED. THROUGH THE WEBSITES, PIZZUTI MARKETED A SUBSCRIPTION-BASED "STOCK ANALYZER" THAT USED "COMPUTATIONAL ALGORITHMS" TO IDENTIFY STOCKS WITH THE "HIGHEST ALPHA AND STRONGEST PERFORMANCE." HOWEVER, PIZZUTI FAILED TO PROVIDE A SOUND BASIS FOR POTENTIAL INVESTORS TO EVALUATE HIS PRODUCT, AND FAILED TO PRESENT A BALANCED STATEMENT OF ITS BENEFITS AND RISKS. PIZZUTI'S STATEMENTS WERE EXAGGERATED AND MISLEADING BECAUSE THEY FALSELY IMPLIED THAT INVESTORS WHO DID NOT PURCHASE HIS SYSTEM WERE TAKEN ADVANTAGE OF BY PROFESSIONAL INVESTORS, AND THAT INVESTORS WHO DID PURCHASE THE SYSTEM WOULD HAVE THE SAME ACCESS TO THE MARKET AS PROFESSIONAL INVESTORS. PIZZUTI ALSO IMPLIED THAT INVESTORS WHO PURCHASED HIS PRODUCT WOULD HAVE ACCESS TO NON-PUBLIC INFORMATION. PIZZUTI FAILED TO DEFINE TERMINOLOGY ABOUT THE PRODUCT HE WAS SELLING AND MEMBERS OF THE PUBLIC COULD NOT EASILY DETERMINE WHAT PRODUCT PIZZUTI WAS SELLING OR WHAT SERVICES THE SYSTEM PROVIDED. PIZZUTI CLAIMED THAT HIS STOCK PORTFOLIOS POSSESSED THE "BEST QUANTITATIVE AND TECHNICAL RANKS IN THE MARKET," HOWEVER, THE WEBSITE CONTAINED NO INFORMATION THAT WOULD ALLOW AN INVESTOR TO EVALUATE WHETHER THIS STATEMENT WAS ACCURATE. THE WEBSITES FAILED TO PROVIDE AN EXPLANATION OF ANY RISKS ASSOCIATED WITH PURCHASING AND USING THE SYSTEM OR ANY OF THE PORTFOLIOS WITHIN THE SYSTEM, AND CONTAINED ONLY A GENERAL DISCLAIMER, WHICH FAILED TO ADDRESS ANY SPECIFIC RISKS PRESENTED BY THE PRODUCTS SOLD THROUGH THE WEBSITE. THE HOMEPAGE CONTAINED FOUR TABS LABELED, "HOME," "ANALYZE," "INVEST," AND "PROTECT." THE HOME AND ANALYZE TABS DESCRIBED THE SYSTEM, AND PROMINENTLY DISPLAYED THE NAME AND PHOTOGRAPH OF PIZZUTI. HOWEVER, THESE TABS FAILED TO IDENTIFY HIS MEMBER FIRM AS THE FIRM ASSOCIATED WITH PIZZUTI AND THE SYSTEM. IN ADDITION, WHILE THE INVEST TAB CONTAINED INFORMATION ON THE FIRM AND PROVIDED FORMS TO OPEN A BROKERAGE ACCOUNT AT THE FIRM, THIS TAB FAILED TO IDENTIFY PIZZUTI AS THE FIRM'S FOUNDER AND A CURRENT PRINCIPAL OF THE FIRM. THUS, THE WEBSITES FAILED TO PROMINENTLY DISPLAY THE FIRM'S NAME, AND FAILED TO DISCLOSE THE RELATIONSHIP BETWEEN THE FIRM AND PIZZUTI. DESPITE KNOWING THAT A MEMBER OF THE FIRM'S STAFF HAD FORGED A SIGNIFICANT BUT UNKNOWN NUMBER OF DEPOSIT SECURITIES REQUEST FORMS AND THUS CAUSED NUMEROUS UNREGISTERED PENNY STOCKS TO BE DEPOSITED INTO FIRM CUSTOMER ACCOUNTS ABSENT SUPERVISORY REVIEW, PIZZUTI FAILED TO CONDUCT ANY INVESTIGATION TO DETERMINE THE SCOPE OF THE FORGERIES AND UNSUPERVISED PENNY STOCK TRADING.

Decision & Order of Offer of Settlement

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

$15,000.00

Suspension

A PRINCIPAL CAPACITY

THREE MONTHS

6/16/2014

9/15/2014

ALL CAPACITIES

10 BUSINESS DAYS

6/16/2014

6/27/2014

THE SUSPENSIONS SHALL RUN CONCURRENTLY.

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, PIZZUTI CONSENTED TO THE SANCTIONS AND TO THE ENTRY OF FINDINGS THAT HE DISSEMINATED SECURITIES-RELATED COMMUNICATIONS TO THE PUBLIC THAT CONTAINED CERTAIN MATERIAL OMISSIONS AND/OR MATERIALLY MISLEADING INFORMATION. THE FINDINGS STATED THAT PIZZUTI MADE THESE COMMUNICATIONS THROUGH INVESTOR-RELATED WEBSITES HE CONTROLLED. THROUGH THE WEBSITES, PIZZUTI MARKETED A SUBSCRIPTION-BASED "STOCK ANALYZER" THAT USED "COMPUTATIONAL ALGORITHMS" TO IDENTIFY STOCKS WITH THE "HIGHEST ALPHA AND STRONGEST PERFORMANCE." HOWEVER, PIZZUTI FAILED TO PROVIDE A SOUND BASIS FOR POTENTIAL INVESTORS TO EVALUATE HIS PRODUCT, AND FAILED TO PRESENT A BALANCED STATEMENT OF ITS BENEFITS AND RISKS. PIZZUTI MADE EXAGGERATED AND MISLEADING STATEMENTS BECAUSE THEY FALSELY IMPLIED THAT INVESTORS WHO DID NOT PURCHASE HIS SYSTEM WERE TAKEN ADVANTAGE OF BY PROFESSIONAL INVESTORS, AND THAT INVESTORS WHO DID PURCHASE THE SYSTEM WOULD HAVE THE SAME ACCESS TO THE MARKET AS PROFESSIONAL INVESTORS. PIZZUTI ALSO IMPLIED THAT INVESTORS WHO PURCHASED HIS PRODUCT WOULD HAVE ACCESS TO NON-PUBLIC INFORMATION. PIZZUTI FAILED TO DEFINE TERMINOLOGY ABOUT THE PRODUCT HE WAS SELLING, AND MEMBERS OF THE PUBLIC COULD NOT EASILY DETERMINE WHAT PRODUCT PIZZUTI WAS SELLING OR WHAT SERVICES THE SYSTEM PROVIDED. PIZZUTI CLAIMED THAT HIS STOCK PORTFOLIOS POSSESSED THE "BEST QUANTITATIVE AND TECHNICAL RANKS IN THE MARKET," HOWEVER THE WEBSITE CONTAINED NO INFORMATION THAT WOULD ALLOW AN INVESTOR TO EVALUATE WHETHER THIS STATEMENT WAS ACCURATE. THE WEBSITES FAILED TO PROVIDE AN EXPLANATION OF ANY RISKS ASSOCIATED WITH PURCHASING AND USING THE SYSTEM OR ANY OF THE PORTFOLIOS WITHIN THE SYSTEM, AND CONTAINED ONLY A GENERAL DISCLAIMER, WHICH FAILED TO ADDRESS ANY SPECIFIC RISKS PRESENTED BY THE PRODUCTS SOLD THROUGH THE WEBSITE. THE WEBSITES FAILED TO PROMINENTLY DISPLAY PIZZUTI MEMBER FIRM'S NAME, AND FAILED TO DISCLOSE THE RELATIONSHIP BETWEEN THE FIRM AND PIZZUTI. PIZZUTI FAILED TO ESTABLISH, MAINTAIN AND ENFORCE AN ADEQUATE SUPERVISION SYSTEM. THE FINDINGS ALSO STATED THAT DESPITE KNOWING THAT A MEMBER OF THE FIRM'S STAFF HAD FORGED A SIGNIFICANT BUT UNKNOWN NUMBER OF DEPOSIT SECURITIES REQUEST FORMS AND THUS CAUSED NUMEROUS UNREGISTERED PENNY STOCKS TO BE DEPOSITED INTO FIRM CUSTOMER ACCOUNTS ABSENT SUPERVISORY REVIEW, PIZZUTI FAILED TO CONDUCT ANY INVESTIGATION TO DETERMINE THE SCOPE OF THE FORGERIES AND UNSUPERVISED LOW-PRICED STOCK TRADING.

RESPONDANT SETTLED ALLEGATIONS AGAINST HIM WITHOUT ADMITTING OR DENYING THESE ALLEGATIONS. THE ALLEGATIONS STATED IN THE COMPLAINT, BRIEFLY, STATES THAT RESPONDANT DISSEMINATED SECURITIES-RELATED COMMUNICATIONS TO THE PUBLIC THAT CONTAINED CERTAIN MATERIAL OMISSIONS AND/OR MATERIALLY MISLEADING INFORMATION. THE ALLEGATIONS STATED THAT RESPONDANT MADE THESE COMMUNICATIONS THROUGH INVESTOR-RELATED WEBSITES HE CONTROLLED.RESPONDANT CONTENDED THAT THE RELAVANT WEBSITES WERE EITHER NOT UP AT THE TIME IN QUESTION OR WERE NOT UNDER FINRA JURISDICTION. NO NVESTMENTS OR INVESTORS WERE INVOLVED IN THIS ALLEGATION. THE ALLEGATIONS ALSO STATED THAT RESPONDANT HAD KNOWLEDGE THAT A MEMBER OF THE FIRM'S STAFF HAD FORGED A SIGNIFICANT BUT UNKNOWN NUMBER OF DEPOSIT SECURITIES REQUEST FORMS AND THUS CAUSED NUMEROUS UNREGISTERED PENNY STOCKS TO BE DEPOSITED INTO FIRM CUSTOMER ACCOUNTS ABSENT SUPERVISORY REVIEW. RESPONDANT FAILED TO CONDUCT ANY INVESTIGATION TO DETERMINE THE SCOPE OF THE FORGERIES AND UNSUPERVISED LOW-PRICED STOCK TRADING. RESPONDANT CONTENDED THAT COMPLAINT WAS BASED ON INCORRECT DATES THAT WOULD HAVE MADE THIS ALLEGATION BASELESS.IN ADDITION; RESPONDANT CONTENDED THAT HE WAS NOT THE DESIGNATED SUPERVISOR AT THE TIME IN QUESTION. NO INVESTORS WERE INVOLVED IN THIS ALLEGATION.

FINRA

FINRA RULE 2010, NASD RULES 2110, 3010 - STEPHEN PIZZUTI, AS HIS MEMBER FIRM'S CHIEF EXECUTIVE OFFICER, FAILED TO REASONABLY SUPERVISE OUTSIDE BUSINESS ACTIVITIES AND PRIVATE SECURITIES TRANSACTIONS OF A RELATIVE AND ANOTHER INDIVIDUAL, BOTH REGISTERED REPRESENTATIVES AT THE FIRM. THESE INDIVIDUALS OPERATED A COMPANY AND SOLD INVESTMENTS IN THE COMPANY AWAY FROM THE FIRM AND ARRANGED FOR THE INVESTORS, MANY OF WHOM WERE FIRM CUSTOMERS, TO HOLD THEIR INVESTMENTS AWAY FROM THE FIRM'S CLEARING FIRM WITH NON-BROKER-DEALER CUSTODIANS. BECAUSE OF HIS BUSINESS AND PERSONAL RELATIONSHIP WITH ONE OF THE INDIVIDUALS, PIZZUTI WAS OR SHOULD HAVE BEEN, AWARE OF HIS RELATIVE'S AND THE OTHER INDIVIDUAL'S FUNDRAISING ACTIVITIES FOR THEIR COMPANY AND HIS RELATIVE'S FUNDRAISING ACTIVITIES FOR ANOTHER COMPANY. PIZZUTI WAS, THEREFORE, RESPONSIBLE FOR TAKING REASONABLE STEPS TO DETERMINE WHETHER THEY WERE IN COMPLIANCE WITH NASD RULES 3030 AND 3040 AND THE FIRM'S CORRESPONDING POLICIES AND PROCEDURES BUT FAILED TO TAKE THESE STEPS. PIZZUTI LEARNED OF WEBSITES CLAIMING THAT HIS RELATIVE'S AND THE OTHER INDIVIDUAL'S COMPANY WAS A PONZI SCHEME AND HAVING SERIOUS FINANCIAL DIFFICULTIES. THESE ALLEGATIONS CONSTITUTED RED FLAGS THAT THE INDIVIDUALS MAY HAVE VIOLATED THE CONDITIONS THE FIRM IMPOSED WHEN IT APPROVED THEIR PARTICIPATION IN THE COMPANY BUT HE DID NOT TAKE APPROPRIATE STEPS TO INVESTIGATE UNTIL AFTER THE FIRM RECEIVED A CUSTOMER COMPLAINT. PIZZUTI FAILED TO TAKE REASONABLE STEPS TO DETERMINE WHETHER THE FIRM AND THE CHIEF COMPLIANCE OFFICER WERE COMPLYING WITH THEIR RESPONSIBILITIES TO SUPERVISE THE INDIVIDUALS.

Decision & Order of Offer of Settlement

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

$10,000.00

Suspension

PRINCIPAL CAPACITY

THREE MONTHS

9/16/2013

12/15/2013

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, PIZZUTI CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS THEREFORE, HE IS FINED $10,000 AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN A PRINCIPAL CAPACITY FOR THREE MONTHS. THE SUSPENSION IS IN EFFECT FROM SEPTEMBER 16, 2013 THROUGH DECEMBER 15, 2013. FINE PAID IN FULL ON JANUARY 21, 2015.

WITHOUT ADMITTING OR DENYING THE ALLEGATIONS, PIZZUTI CONSENTED TO THE DESCRIBED SANCTIONS AND TO THE ENTRY OF FINDINGS THEREFORE, HE IS FINED $10,000 AND SUSPENDED FROM ASSOCIATION WITH ANY FINRA MEMBER IN A PRINCIPAL CAPACITY FOR THREE MONTHS. THE SUSPENSION IS IN EFFECT FROM SEPTEMBER 16, 2013 THROUGH DECEMBER 15, 2013.

BREACH OF CONTRACT, COMMON LAW FRAUD, CONSTRUCTIVE FRAUD THROUGH BREACH OF FIDUCIARY DUTY, NEGLIGENCE AND GROSS NEGLIGENCE.

$345,194.00

STIPULATED AWARD: CLAIMANTS FILED THEIR NOTICE OF SETTLEMENT AND REQUEST FOR THE ENTRY OF A STIPULATED AWARD. CLAIMANTS STIPULATED AND AGREED THAT, AFTER REVIEW OF THE DISCOVERY PROVIDED BY RESPONDENTS IN THIS MATTER, THEY HAVE DETERMINED THAT THEIR FILING OF CLAIMS AGAINST MR. STEPHEN PIZZUTI WERE UNFOUNDED, AND AS SUCH CLAIMANTS WITHDREW ALL ALLEGATIONS OF WRONGDOING AGAINST STEPHEN PIZZUTI. CLAIMANT FURTHER DISMISSED WITH PREJUDICE THEIR CLAIMS AGAINST ALL RESPONDENTS. THE PARTIES STIPULATED AND AGREED TO THE ENTRY OF A STIPULATED AWARD.

THE CLAIMANT ALLEGED THAT A FORMER REGISTERED REPRESENTATIVE, ONE ANDREW MELVILLE, MISHANDLED HER ACCOUNT THROUGH UNAUTHORIZED TRADING. THE CLAIMANT FURTHER ALLEGED THAT MR. STEPHEN PIZZUTI, PRESIDENT, AND MR. LARRY KASE, COMPLIANCE OFFICER, FAILED TO PROPERLY SUPERVISE MELVILLE.

$15,001.00

$4,500.00

CASE WAS SETTLED WITH NO ADVERSE FINDINGS ON THE BEHALF OF STEPHEN D. PIZZUTI. MR. PIZZUTI WAS REPSONSIBLE FOR HIS ATTORNEYS FEES ONLY AND WAS DISMISSED FROM THE CASE WITHOUT PREJUDICE.

THE CLAIMANT ALLEGED THAT A FORMER REGISTERED REPRESENTATIVE, MISHANDLED HIS ACCOUNT THROUGH EXCESSIVE AND UNAUTHORIZED TRADING AND OTHER MEANS OF ALLEGED WRONGDOING. THE CLAIMANTS FURTHER ALLEGED THAT MR. STEPHEN PIZZUTI, PRESIDENT, COMPLIANCE OFFICER, FAILED TO PROPERLY SUPERVISE REGISTERED REP.

$28,619.00

$15,000.00

STIPULATED SETTLEMENT AGREEMENT ENTERED INTO ON 03/10/2000 DISMISSING ME AS A RESPONDENT WITH PREJUDICE.

THE CLAIMANTS ALLEGED THAT A FORMER REGISTERED REPRESENTATIVE, MISHANDLED THEIR ACCOUNTS THROUGH EXCESSIVE AND UNAUTHORIZED TRADING AND OTHER MEANS OF ALLEGED WRONGDOING. THE CLAIMANTS FURTHER ALLEGED THAT MR. STEPHEN PIZZUTI, PRESIDENT, AND COMPLIANCE OFFICER, FAILED TO PROPERLY SUPERVISE REGISTERED REP.

$96,530.00

$45,000.00

MATTER SETTLED ON 11/16/2000, WHEREAS I WAS DISMISSED WITH PREJUDICE.

FLORIDA DIVISION OF SECURITIES AND INVESTOR PROTECTION.

UNSUITABILTY, CHURNING, FAILURE TO SUPERVISE.

Stipulation and Consent

COPY THE DIVISION ON ALL CUSTOMER COMPLAINTS FOR A PERIOD OF A YEAR, AND SEGREGATE CUSTOMER FILES.

NA

ALLEN DOUGLAS SECURITIES, INC. AGREED TO PAY THE DEPARTMENT THE SUM OF TEN THOUSAND DOLLARS ($10,000) TO COVER THE ADMINISTRATIVE COSTS OF THEIR EXAMINATION. NO COSTS, OR SANCTIONS WERE IMPOSED AGAINST EITHER MR. STEPHEN PIZZUTI, OR MR. RICHAR PIZZUTI.

THE CLAIMANT ALLEGED THAT A FORMER REGISTERED REPRESENTATIVE, MISHANDLED HIS ACCOUNT THROUGH EXCESSIVE AND UNAUTHORIZED TRADING AND OTHER MEANS OF ALLEGED WRONGDOING. THE CLAIMANT FURTHER ALLEGED THAT MR. STEPHEN PIZZUTI, PRESIDENT AND COMPLIANCE OFFICER, FAILED TO PROPERLY SUPERVISE REGSITERED REP.

$77,330.00

$9,900.00

SETTLEMENT AGREEMENT ENTERED INTO ON NOVEMBER 30, 2001 DISMISSING ME AS A RESPONDENT WITH PREJUDICE.

THE CLAIMANTS ALLEGED THAT A FORMER REGISTERED REPRESENTATIVE, MISHANDLED THEIR ACCOUNT THROUGH EXCESSIVE AND UNAUTHORIZED TRADING AND OTHER MEANS OF ALLEGED WRONGDOING. THE CLAIMANTS FURTHER ALLEGED THAT MR. STEPHEN PIZZUTI, PRESIDENT, AND COMPLIANCE OFFICER, FAILED TO PROPERLY SUPERVISE REGISTERED REP.

$188,655.00

PER U6 ALL RELIEF IS DENIED.- AN ARBITRATION WAS FILED, BUT PRIOR TO ARBITRATION PANEL, CLIENT DECIDED TO SETTLE OUTSIDE OF ARBITRATION.

FAILED TO SUPERVISE

$28,000.00

$17,000.00

$17,000 SETTLEMENT TO CUSTOMER BY CORPORATE SECURITIES GROUP. I WAS DISMISSED VOLUNTARILY WITH PREJUDICE FROM ARBITRATION. THE CLAIM WAS NOT SETTLED AGAINST ME. NOT PROVIDED